Snack info board

[Lord DarkHelmet]

Butterfly vs Long Call. Just depends on your gamble on the momentum of the move.

Personally, I would always use a spread. It "spreads" the risk of a major loss. Plus, if you buy a long Call at this volatility, you have to calculate what your long Call would be after the IV crush. Even with a larger upside move, you might not make any money, as the MM's bring down the option's price on you through this anticipated IV drop. A long Call is a Vega positive net position, so a drop in IV will kill the position and the odds are stacked against you to make money. However, if you pick a strike that is near OTM, then if AAPL jumps far, most of your value will be intrinsic, which is not subjected to volatility manipulation. You would be paying a high premium for the time value to enter however. If AAPL does go down, you are toast.

I will look at AAPL next week and give you an idea of a possible butterfly position.