If you agree that AAPL will respect the 50-day moving average, consider the following trade that relies on the stock remaining above $165 (4.3% below the 50-day) (through expiration in seven weeks. Buy to Open AAPL 25Mar 160 put (AAPL220325P160)
Sell to Open AAPL 25Mar 165 put (AAPL220325P165) for a credit of $1.20 (selling a vertical) This credit is $0.04 less than the mid-point of the option spread when AAPL was trading around $172. Unless the stock gains quickly from here, you should be able to get close to this amount. Your commission on this trade should be no more than $1.30 per spread. Each spread would then yield $118.70. This trade reduces your buying power by $500 and makes your net investment $381.30 ($500 – $11.70) for one spread. If AAPL closes above $165 on March 25, both options will expire worthless and your return on the spread would be 31% ($118.70/$381.30). ______________________________________________________________________
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