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Posted October 31, 2023 at 9:45 am
Market Chameleon Chart Showing APPL Historical Options Straddle Premiums Pre-Earnings
AAPL is scheduled to release earnings on November 2, 2023 after the market closes. As we get closer to the announcement, there are a number of key metrics that traders pay attention to help inform their trading strategies. One of these key metrics is the option straddle, or the market’s implied move of the stock post earnings announcement.
Our analysis spans back to 2014, examining how the option straddle typically closes just before earnings. The option straddle premium represents the implied move of the stock post-earnings announcement.
On average, the option straddle premium for AAPL has been approximately 4.6% of the spot price, with a median value of 4.5%. The range has fluctuated from a high of 6.85% to a low of 2.8%. These figures provide a historical baseline, offering insights into how the market has priced the pre-earnings straddle.
If we focus specifically on AAPL’s Q4 earnings, the data suggests the straddle has tended to close at slightly higher valuations. On average, it’s been around 4.7%, with a median of 4.8%.
Now, let’s consider the current scenario. The current straddle sits at a 4.3% premium, which is close to the historical averages. However, it suggests there’s still potential for appreciation if the straddle were to move closer to its historical average.
It’s essential to remember that these metrics reflect how the market typically prices pre-earnings straddles and do not account for actual earnings results. Nonetheless, this data can provide valuable insights into potential market behavior leading up to the earnings announcement.
As AAPL’s earnings date approaches, keeping an eye on these metrics can help you make more informed decisions, identify opportunities, and fine-tune your trading strategies. While past performance is not indicative of future results, historical insights can be a valuable resource in your trading toolkit.
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Originally Posted October 30, 2023 – AAPL Earnings Coming Up: What Does the Option Straddle Tell Us?
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