A way to take profits and protect your post-earnings gain in Apple

Apple, a Magnificent 7 laggard this year, finally caught investors’ attention again with an historic announcement during their first-quarter earnings release, initiating the largest corporate buyback ever. Apple (AAPL) topped estimates on both revenue and earnings per share, but the $110 billion buyback was the catalyst for Friday’s pop. Although I believe Apple is back on its road to recovery, I want to take some profits after getting long pre-earnings . AAPL YTD mountain Apple, YTD Buybacks have been a consistent and persistent theme for Apple over the years and should truly stabilize the iPhone maker short-term. The tech company added nearly $190 billion of market cap after the earnings release, as it sits just under $3 trillion currently. Per some great reporting by friend and colleague Bob Pisani: In the last 12 months, Apple has bought back $84.5 billion in stock, far beyond anyone else in the S & P 500. I believe in the long-term recovery of Apple, but I am not convinced that the stock will reclaim the $200 level this month. The technicals below support my view. Selling a call spread is a complimentary trade after my Apple bullish risk reversal last week where I sold the $165 put and bought the $175 call (at no-cost). Normally, if you were long a call, you would just simply sell a higher priced call to make it a call spread. However, I want to have this trade independent of a long position in Apple focusing on the newly trade levels up at $185 which offer premium to be collected at the $190 level. The Trade Selling a Call Spread: Sold the 5/17/24 AAPL $190 Call for $1.02 Bought the 5/17/2024 AAPL $195 call for $0.33 Net Credit spread collecting 69 cents per one spread sold Now I have some form of protection on my long $175 call. Meaning if Apple settles above $190, my profits on these back-to-back Apple trades are the $15 dollars between the $175 strike and the $190 strike, plus the 69 cents I collected on this new call spread. DISCLOSURES: (Long Apple, sold spread) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.