AAPL Calendar Call Spread 38% undervalued · Invest & Retire Community

AAPL Calendar Call Spread 38% undervalued

Bullish play with a target stock price of $190. Strategy has +477% upside potential and 38% undervalued. Since we do now know what the exact implied volatility will be on February 2, we can use our historical data to make an educated estimate to help us calculate the value of the 16-Feb-24 option. Applying the median historical implied volatility of 25.8 from similar options, the theoretical value of the call is 3.98 at the date of the 02-Feb-24 expiration. Using the above assumptions gives us a potential upside of +477% for this calendar spread.

Do we assume going into earning the vol will go up? Usually does so happy trading....

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