Should investors press Apple longs via options – Susqehanna

Analysts question whether Apple (NASDAQ:) investors should leverage their long positions using options strategies. The stock has risen nearly 9% since the company’s Worldwide Developers Conference, entering a period known for seasonal strength.

While AAPL is not covered by Susquehanna, analysts explore the benefits of “covered 1×2 call spreads” for existing long positions. This strategy allows investors to magnify potential gains while limiting downside risk.

Historically, July has been AAPL’s strongest month, averaging a 6.5% increase and positive returns in 9 out of the last 10 years. Susquehanna highlights the recent rise in call options buying as a sign of bullish sentiment, but also notes a corresponding increase in volatility. This has made buying calls outright more expensive.

Analysts state the “setups for call spreads or 1×2 call spreads is an attractive one.”

Susquehanna assesses using the July 26th expiration 215/230 covered 1×2 call spread. This would involve buying the 215 calls and selling twice the number of 230 calls. This structure limits potential gains above $230 but offers leverage between $215 and $230.

In conclusion, Susquehanna’s analysis suggests that covered 1×2 call spreads could be an attractive option for AAPL longs seeking to amplify potential gains during the historically strong month of July, while still managing downside risk.