Take Apple as an example, how to sell iron eagle options

Sell Iron Eagle Strategy

1. What is the selling iron eagle strategy?

Sell Iron Eagle =Sell a call spread + sell a put spread at the same time

The essence is:

Bet that when the price expires, it will fall within a range that will not rise much or fall sharply

From the beginning, youPremium received, as long as the expiration price is within the range, you can make a profit.

2. Strategic structure (four legs)

Assume that the target is a certain stock/ETF/index (such as SPY, AAPL, etc.)

Put spread Put Credit Spread

• SellPut with higher strike price (close to current price)

• BUYPut with lower strike price (further imaginary value)

Call spread Call Credit Spread

• SellCall with lower strike price (close to current price)

• BUYCall with higher strike price (further imaginary value)

👉 Four options have the same expiration date

3. When is it suitable to sell Iron Eagle?

Suitable for the scene

• marketOscillation/sideways

• High implied volatility (IV)

• Near Pre-Earnings (But Be Cautious)

Does not fit the scene

• Obvious trend market (strong bull/strong bear)

• Major events are known to trigger unilateral market

• Extremely low volatility (premium is not cost-effective)

4. Advantages and disadvantages

✅ advantage

• Limited profits and losses, controllable risks

• Relatively high winning percentage

• For robust traders

• Reusable, systematic transactions

❌ shortcoming

• Limited single income

• Extreme market conditions may quickly approach maximum losses

• Requires management (early liquidation/rolling)

Analysis of Apple's recent trends

$Apple (AAPL) $The trend in the last week (December 12th to December 19th) has shown a volatile downward trend. The possibility of sideways shocks in the short term is high, but we need to pay attention to the effectiveness of key support levels.

Factors supporting sideways fluctuations:

1. Technical support: The current stock price is close to the support level at $268.97, and there was a small rebound on December 19, indicating that there is buying support at this position

2. Trading volume characteristics: The trading volume on December 19 was 51.63 million shares, with a volume ratio of 1.22, which belonged to the normal trading level, and there was no panic selling

3. Institutional view: Analyst consensus is positive (33 recommend buying, 15 hold), and the average target price of $285.48 provides psychological support

4. Fairly Valued: Forward PE 32.94 is close to historical average of 29.93, not significantly overvalued

Analysis of key technical bits

• Support: $268.97 (recent low)

• Resistance: $278.27 (prior high)

• Key range: US $269-278 constitutes a short-term shock range

Apple sells iron eagle options strategy

1. Strategy structure

Investors Build A On Apple Inc. (AAPL) OptionsShort Iron Condor Strategy。 The strategy is defined bySame maturity dateA set of Put Call spreads and a set of Call Put spreads are combined, the core goal isPremium received, which is suitable for investors to judge that AAPL has a high probability of maintaining range volatility before the expiration date, and there will be no large unilateral market.

(1) Put end (bullish spread, bullish)

• Sell higher strike pricePut: Investors sell strike priceK ₂ = 267.5Put, charge premium$1.14。 The contract is close to the current price and is the main source of premium on the Put side.

• Buy Lower Strike Price Put: Investors buy strike priceK ₁ = 262.5Put, Pay premium$0.45。 This contract is used to limit the maximum risk in the event of a sharp decline in AAPL.

Put-side net income (per share)： = 1.14 − 0.45 =$0.69

This part is used when the AAPL expiresNot noticeably below $267.5Obtain premium income in the case of.

(2) Call side (bearish spread, bearish)

• Sell lower strike priceCall: Investors sell strike priceK ₃ = 277.5Call, collect premium$0.97。 This contract is the main source of income for the Call side.

• Buy higher strike priceCall: Investors buy strike priceK ₄ = 282.5Call, pay premium$0.27。 This contract is used to hedge risks and cap losses when AAPL rises sharply.

Call-side net income (per share)： = 0.97 − 0.27 =$0.70

This part is used when the AAPL expiresInsignificant breakout of $277.5Premium is charged in the case of.

Initial net income

Of Iron Eagle StrategyTotal net premiumIs the sum of the net income of the Put side and the Call side:

Net premium (per share)： = 0.69 + 0.70 =$1.39/share

Since 1 lot of options = 100 shares:

Total net income earned by investors when opening positions： = 1.39 × 100 =$139/contract

This is also the time to sell the Iron Eagle strategyMaximum potential profit。

3. Maximum profit

When the AAPL expiration price * * is between $267.5 and $277.5 (inclusive) * *:

• Put end with CaAll options on the ll end are out-of-the-money

• All four options go to zero

Maximum profit (per share): = Net premium received =$1.39

Maximum profit (per contract)： = 1.39 × 100 =$139/contract

4. Maximum loss

The biggest loss of selling the Iron Eagle strategy occurs whenOne-sided spread fully triggeredIn the case of, that is, AAPL has a sharp rise or a sharp fall.

One-sided strike spread: = $5 (267.5 − 262.5 or 282.5 − 277.5)

Maximum loss (per share): = Strike spread − Net premium = 5 − 1.39 =$3.61/Share

Maximum loss (per contract)： = 3.61 × 100 =$361/contract

Occurs include：

• AAPL expiration price ≤ $262.5 (full in-price on the Put end)

• Or AAPL expiration price ≥ 282.5 USD (full price on the Call side)

5. Break-even point

This selling iron eagle strategy existsTwo Breakeven Points：

Break-even point below: = Put Sell Strike Price − Net premium = 267.5 − 1.39 =$266.11

Above break-even point: = Call Sell Strike + Net premium = 277.5 + 1.39 =$278.89

Maturity judgment rules：

• Between US $266.11 ~ US $278.89→ Earnings for investors

• = $266.11 or $278.89→ flat

• ≤ 266.11 or ≥ US $278.89→ Investor losses

6. Risk and return characteristics

• Maximum benefit: $139/contract (limited)

• Maximum loss: $361/contract (limited)

• Profit-loss ratio: Gain: Loss ≈ 139: 361 ≈1: 2.6

• Strategy Characteristics：

  • Focusing on the collection of time value and the decline of implied volatility

  • Bilateral risks are limited, and the maximum loss is specified in advance

  • The requirements for direction judgment are not high, but forHigher requirements for price range and volatility judgment

• Applicable situations: When investors expect that Apple's stock price will most likely remain atFluctuating within the range of $267.5 ~ $277.5, neither fall significantly below the support, nor is it likely to rise sharply to break through the pressure level, and hopes to obtain stable premium returns by selling the option portfolio on the premise of clarifying the maximum risk, this selling iron eagle strategy has Strong practical value.