Apple (AAPL) is scheduled to report earnings after the close today. The stock is running up into the announcement and our call is deep in the money. However, it’s possible shares could sell off sharply if earnings disappoint.
Therefore, I am recommending we buy a protective put to hedge our position. If AAPL declines sharply following earnings, this put could spike in value, potentially allowing us to reduce our cost basis on the position.
Note: No action is needed on the AAPL Feb Monthly (2/17) 139 Call at this time.
Current Stock Price: $150.18
Cost Basis: $149.54
Action: Buy to open the AAPL Feb Week Two (2/10) 140 Put for around $0.71 but adjust as needed to buy a put today
New Cost Basis: $150.25