I am very bullish on AAPL and like to use options to catch its long term move (say, one year). However, the implied volatility is very high. If I do calls, it would be too expensive. If I do bullish call spreads, the upside move is limited. If I do diagnoal call spread, the near term premium is too little and would not offset the long premium meaningfully. What is the best bullish strategy under the high implied volatility?
What is the right bullish strategy under high IV?
- Thread starter emk662
- Start date
Why do you say the implied vol is high?
I believe it's 52 wk iv low is around 17% isn't it. I wouldn't compare it to other blue chips. You might want to wait until after the june 9 split. That might change who is investing in AAPL, I know a lot of option traders treat it like another index due to it's high price and attractive option premiums and plan on sitting on the sidelines for a while.
However if it is high IV to you, there is nothing wrong with a call vertical debit spread. Higher IV gives you a good entry price and as the vol. drops as price goes up you will get to the profit of the vertical faster. If you are truly worried about capping your profit and can honestly say you will hold it to the moon than just buy the stock and hold it.
You may want to check out vxapl, the apple vix index, it's quite low compared to the recent past.
