Bullish Options “Example Trade” Involving AAPL Unveiled by Schwab Network

With Apple (AAPL) climbing significantly today and trading near some key statistical levels, Schwab Network unveiled a “bullish example trade” involving call options on AAPL stock.

Apple’s Technical Status Analyzed

Apple has been outperforming the overall tech sector in recent weeks, Rick Ducat, a commentator at the network, reported. On the other hand, all of AAPL’s “moving averages have been trending down,” and the shares have fallen below their trend line, he noted.

A wide view of an Apple store, showing the range of products the company offers.

But the stock is closing in on its “previous low” of $208.40 and its 21-day exponential moving average, Ducat said.

For AAPL, $222 to $225 is “an important area to watch,” the commentator noted.

A Bullish “Example Trade”

Ducat suggested that traders could buy the $215 and $235 calls that expire on May 16 while selling two $225 calls that expire on the same day.

With this approach, traders would have a maximum loss of $150 and a maximum profit of $850, according to the commentator.

If Apple rises about 3%, traders who use the strategy will reach their “first break-even area,” but they will start losing money if the shares climb 11%, according to Ducat.

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Disclosure: None. This article is originally published at Insider Monkey.