So what this guy did is a trade known as a "super bear." When you buy puts (a bearing position) and sell calls or a call spread (a bearish position) to pay for the cost of the puts, you are basically double leveraged to the short side. If you wanted to just bet that AAPL would go down, you could have done just one of them, but by doing both, you increase your risk, but also increase your potential profits.
One thing to note, his mechanics of the trade were also very poor. Generally when you are selling a call spread, you want to use out of the money options. For example, when apple was trading at 121 prior to earnings announcement, if he had sold the 125 calls, he could have achieved the same thing, but instead he shorted the 120 calls. This means if Apple hadn't gone up, but just stayed where it was, his call spread would have still lost money.
Secondly, his choice of put strikes was overly aggressive. Again, Apple was trading at 121 before earnings. It could have dropped $10 and his 100 and 105 puts would still expire worthless on Friday. At best they might have broken even, if there was a volatility expansion.
This guy wasn't just playing apple to "drop after earnings," the trade would have needed a 17% down move. If this trade was real it was a stupid trade even if he had only done single contracts of each position.
This is incorrect. Options decay in value every day. There is a metric known as Theta that tracks an individual options daily decay. There is also volatility contraction that takes place a) after earnings reports and b) when stocks move upwards. He has absolutely (if this trade was real in the first place) lost real money already.
