Why Shorting Puts in AAPL Could Be a Strategic Move Amid Stagnant Price Action

Apple Inc. (AAPL) has entered a period of consolidation in late 2025, with its stock price hovering near $273.40 as of December 29, 2025, amid mixed technical signals and robust fundamental performance. While the stock's range-bound behavior might deter aggressive long positions, the interplay of bullish options positioning, strong earnings momentum, and technical indicators suggests that shorting out-of-the-money (OTM) puts could offer a compelling low-risk, high-reward strategy. This approach leverages AAPL's structural downside protection while capitalizing on market sentiment skewed toward optimism.

A Range-Bound Stock with Structural Downside Protection

AAPL's price action in December 2025 reflects a textbook consolidation pattern, with the stock trading above its 50-day and 100-day moving averages but below its 20-day exponential moving average. This suggests a tug-of-war between short-term sellers and longer-term buyers, with key support levels like the 50-day SMA at $267.85 and pivot points near $273.81 acting as psychological anchors. Meanwhile, technical indicators like the RSI (14) at 49.17 and the MACD at 0.21 signal neutrality to mild bullish bias, while the Price Rate of Change (ROC) at -1.93 hints at lingering near-term selling pressure.

Crucially, AAPL's fundamentals provide a floor for the stock. The company's Q4 2025 earnings report, released in October, highlighted record revenue of $102.5 billion-a 8% year-over-year increase-driven by a resilient iPhone business and a surging Services segment. The latter, which posted $28.8 billion in revenue (up 15% YoY), offers recurring, high-margin cash flows that insulate AAPL from cyclical downturns. Additionally, management's strategic pivot into AI, including features like Apple Intelligence, underscores long-term growth potential, further reinforcing the stock's structural support.

Options Positioning: A Bullish Sentiment Overhang

Options market data reinforces the case for shorting OTM puts. The put/call ratio for AAPL, based on open interest, stands at 0.71 as of December 2025, indicating a clear preference for bullish bets. This ratio has dipped slightly from 0.71 to 0.7, reflecting growing confidence in the stock's near-term trajectory. Open interest in put options has risen 1.4% to 2.0 million contracts, but call open interest has grown faster, up 2.2% to 3.0 million contracts, highlighting a widening gap between bearish and bullish positioning.

For specific OTM put options, the January 2026 expiration cycle offers actionable opportunities. The $265 and $270 put options, for instance, have midpoint premiums of $2.27 and $3.40, respectively, offering short-put yields of 0.8566% and 1.259%. These strikes are well above the stock's current price, making them highly unlikely to be assigned, especially given AAPL's strong earnings trajectory and the expected move of ±$1.73 for the December 26, 2025, expiration. The open interest for these puts has also increased, with the January 2026 expiration adding 36,126 contracts in recent trading sessions.

Technical and Fundamental Convergence: A Case for Shorting OTM Puts

The convergence of technical and fundamental factors makes shorting OTM puts particularly attractive. AAPL's technical indicators, while mixed, lean toward bullish bias. The 5-day and 50-day simple moving averages (272.84 and 271.44, respectively) suggest a buy signal, and the stock's position above its 100-day SMA implies a structural upward bias. Meanwhile, the Services segment's recurring revenue model and AI-driven innovation provide a buffer against downside risks, even if the stock remains range-bound.

From an options strategy perspective, shorting OTM puts allows investors to collect premiums while benefiting from AAPL's strong support levels. For example, the $265 put option, with a strike price 3.4% below the current stock price, offers a yield of 0.8566% while requiring AAPL to drop nearly 4% to trigger assignment-a scenario that appears unlikely given the company's earnings momentum and technical support. Similarly, the $270 put, with a 1.259% yield, requires a 1.2% decline to be assigned, a move that would contradict AAPL's recent performance above its 50-day SMA.

Risks and Considerations

While the case for shorting OTM puts is compelling, risks remain. A sharp selloff in AAPL-triggered by macroeconomic headwinds or earnings misses-could invalidate this strategy. However, AAPL's Q4 2025 results, which included a 13% YoY increase in diluted earnings per share and a 47.2% gross margin, suggest that such risks are currently muted. Additionally, the stock's expected move of ±$1.73 implies a projected range of $270.33 to $273.79 for the December 26, 2025, expiration, further supporting the likelihood of OTM puts expiring worthless.

Conclusion

AAPL's stagnant price action, while discouraging for momentum traders, creates an environment where income-focused strategies like shorting OTM puts can thrive. The stock's strong fundamentals, bullish technical indicators, and options positioning all point to a scenario where downside risks are capped, making OTM puts a low-risk, high-reward play. For investors seeking to capitalize on AAPL's range-bound behavior while hedging against volatility, shorting OTM puts in the January 2026 cycle-particularly the $265 and $270 strikes-offers a strategic path forward.