AAPL Bullish Calendar Call Spread Looks Cheap at 62 Cents

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This AAPL Calendar Call Spread Can Net 564%

Bullish play with a target stock price of $190

Strategy has +564% upside potential and 25% undervalued

Strategy: AAPL Calendar Call Spread
Sell 03-Nov-23 190 Call1.47
Buy 17-Nov-23 190 Call2.09

Apple has seen its price gain +1.2% today to $176.88. Today's price action is showing strength in both the stock and the overall market. Setting up this calendar spread with strikes at $190 gives you a bullish bias to tap into AAPL stock's strength.

Option Profit Calculator Results for AAPL Calendar Spread at 03-Nov-23 Expiration

In this scenario, the optimal stock price for the option strategy would be $190.00 on the date of the first expiration, November 3, 2023. This is equal to the strike price of the options in the spread. Since both AAPL and the market are showing upward pressure, and the strikes are above the current stock price of $176.90, the spread is taking advantage of this bullish momentum. If the stock price is $190.00 at expiration, we can benefit from the 03-Nov-23 call, which we sold, expiring worthless, and the option that we are long, the 17-Nov-23 call, will still have time premium built in.

Since we do now know what the exact implied volatility will be on November 3, we can use our historical data to make an educated estimate to help us calculate the value of the 17-Nov-23 option. Applying the median historical implied volatility of 26.6 from similar options, the theoretical value of the call is 4.11 at the date of the 03-Nov-23 expiration. Using the above assumptions gives us a potential upside of +564% for this calendar spread.

AAPL Calendar Spread Value vs. Market Price

According to Market Chameleon estimated value, AAPL Calendar Spread is trading at a 25% discount to historical benchmark.

If we use historical data to measure how similar spreads in AAPL were priced in the market, the 4-year average price was 0.83, with a high mark of 1.49 and a low of 0.44.

Currently, the calendar call spread is bid at 0.55 and offered at 0.62. The midpoint of the spread is 0.58.

If we use 0.83 as our historical fair value benchmark, the current market ask price is at a 25% discount, while the current market midpoint represents a 29% discount.

Current PriceHistorical Values of Similar Spreads
Market Chameleon captures daily records of market data to calculate historical benchmarks and generate estimated values.


The AAPL calendar call spread we've identified here can be a good way to play a bullish outlook because the option strategy has a +564% upside potential, is 25% underpriced relative to historical measures, and will benefit from the stock price moving higher to $190.

See how Market Chameleon can help you make smarter and more efficient trades!

NOTE: Stock and option trading involves risk that may not be suitable for all investors. Examples contained within this report are simulated And may have limitations. Average returns and occurrences are calculated from snapshots of market mid-point prices And were Not actually executed, so they do not reflect actual trades, fees, or execution costs. This report is for informational purposes only, and is not intended to be a recommendation to buy or sell any security. Neither Market Chameleon nor any other party makes warranties regarding results from its usage. Past performance does not guarantee future results. Please consult a financial advisor before executing any trades. You can read more about option risks and characteristics at theocc.com.

The information is provided for informational purposes only and should not be construed as investment advice. All stock price information is provided and transmitted as received from independent third-party data sources. The Information should only be used as a starting point for doing additional independent research in order to allow you to form your own opinion regarding investments and trading strategies. The Company does not guarantee the accuracy, completeness or timeliness of the Information.