To The Moon

$Apple(AAPL)$

Monday saw a 1.6% rally in Apple on an upgrade, but this week's institutional flows have skewed bearish - buying 230 puts, selling 225 puts; buying 227.5 puts, selling 222.5 puts.

So let's start by selling some upside calls first: Sell $AAPL 20240719 240 CALL$ 

That said, there were some bullish trades as well, employing a rather ingenious "free-ride" call spread strategy:

• Buy $AAPL 20240816 230 CALL$  x1

• Sell $AAPL 20240816 260 CALL$  x10

The rationale is to buy 1 lot of 230 calls while selling 10 lots of 260 calls - essentially betting that Apple rallies by mid-August, but not by more than 11%.

Such a ratio spread typically expresses a low conviction bullish view - a reluctance to pay outright for upside exposure but also an unwillingness to completely miss out on further upside.

This trade likely has more sentiment value than actionable intent. For those holding stock, continuing to hold while selling straddles/strangles weekly is likely a more profitable strategy.

$Tesla Motors(TSLA)$

Last Thursday, when I sold the 245 puts on Tesla, I thought it was a bit aggressive as one scenario was a re-test of lows on Friday. Little did I expect the stock to reverse and rip higher!

That said, being conservative isn't necessarily bad. Predictions can't be 100% precise - as long as it's within the expected range, it's acceptable.

Institutions also appear cautiously positioned given the lack of their typical weekly buy-write flows on Tesla. Quite telling, especially with earnings due the following week on July 23rd after the close.

The violent up and down swings last week seem to have prevented a unified directional view from being priced in. This week's most active upside strikes are the 300 calls followed by 275 calls, likely to extend into next week as well.

Some investors are already positioning for a potential upside trade next week, selling this fairly prevalent call spread:

• Sell $TSLA 20240726 270 CALL$ 

• Buy $TSLA 20240726 280 CALL$ 

Barring any surprises, this strategy seems reasonable - well-positioned for the classic "sell-off into event, rally after" pattern often seen around earnings. One to continue monitoring.

I sold some $TSLA 20240719 275 CALL$  against stock for this week's expiry.

$NVIDIA Corp(NVDA)$

With July monthly options expiring this week, previously hefty open interest at the 90, 120 and 130 strikes has been bled down. New focal strikes appear to be 133, 135, 136, 140 and the 150 calls.

For puts, the more relevant strikes are the 125 and 130 lines.

However, with TSM earnings also due this week, typical options flow patterns may get distorted.

Last week's standout trade was an institution buying the $NVDA 20240719 133 CALL$  while selling the 136 calls - expressing a view we could see a sizable upside move one of these days, though not necessarily into this Friday's close.

As for a durable strategy into expiration, this 4-way iron condor looks relatively balanced:

• $Buy NVDA 20240719 121 PUT$

• $Sell NVDA 20240719 122 PUT$

• $Sell NVDA 20240719 134 CALL$

• $Buy NVDA 20240719 135 CALL$

• Essentially playing for a 121-135 trading range into expiry.

$Trump Media & Technology(DJT)$

For these meme-driven, high volatility movers lacking fundamentals, being short premium is preferred given the inflated implied volatilities.

A straightforward sell call spread, perhaps selling the 45 strikes while buying some 50 strike calls for protection, is a fairly common trade structure.

The premise is to capitalize on elevated short-dated implied volatilities by selling richly priced options, while the long call wing hedges against an unexpected upside blow-off. Even if the stock just grinds sideways, this strategy can still profit from volatility decay over time.