11/15/2013 FRI                              

Apple Inc.                        NYSE: AAPL  528.16

Avg. Daily Volume     11,673,139

IV    Dec 22.35%   Jan 24.00%

AAPL looks like it has some support at the 520 level over the past month or so, which was the 28% retrace from the hi of 705 to the lo of 385.10.

      Look at a Dec or Jan put 500/450/400 Butterfly’s. The Jan is trading around 5.95 and the Dec is trading around 3.45 on the mid-point. There may be a little more upside so try looking at low balling on the spread or even legging into the spread if it pops by buying the 500/450 put vertical and then taking advantage of the ensuing drop selling the 450/400 put vertical to complete the butterfly spread hopefully for a great price reducing risk even further.

      The risk is only $345 on the Dec and $595 for the Jan spread with potential of reward of $4,655 and $4,405. With a relatively low Implied Volatility and a seemingly over bought market the play offers both excellent potential as well as low Theta decay over the next 1 – 2 months.

Open Int. (est.)   Strike Dec Monthly (35) Jan Monthly (63)

400             2,150                          27,720

410             1,120                          14,525

420             1,180                            7,860

430             1,390                            8,100

440             2,560                            5,675

450             6,150                          41,700

460             4,260                          21,150

470             3,480                          13,820

480             6,245                          16,320

490             4,635                          14,340

500           18,100                          86,465

For a better understanding of Butterfly spreads you can see the full 3 part article published on tradersexclusive.com

Also for trading ideas and commentaries and responses from industry professional go to https://mtmtradercommunity.com

*Disclaimer: This is not a recommendation. All trading entails risk. Anyone employing any strategies and having limited knowledge of options trading should consult with a FINRA licensed professional.