From “Options trader lays out huge bet on Apple into earnings” which aired Thursday on CNBC:
“The market is currently implying a 5.3% move [in either direction], substantially higher than the 3.2% we’ve seen over the last eight quarters, and one trader is taking advantage of this elevated implied volatility,” Tony Zhang, chief strategist at OptionsPlay, said Wednesday on CNBC’s “Fast Money.”
″[They are] selling nearly 20,000 contracts of the 150, 145 and 140-strike puts that expire this Friday, collecting about $770,000 in premium, betting that the stock will be above $140 by expiration. But, if it’s below $140, [they have] $290 million of stock purchase obligation,” Zhang said.
This particular trade includes a sale of 9,998 contracts of the 145-strike puts, alongside 4,999 contracts of the 150 and 140-strike puts, each.
Cue the video:
My take: That Apple will close Friday above $140 seems a pretty good bet, but it’s not one I could afford to make.
BTW, Tony Zhang looks like he’s 12.