The next big AAPL investment

Apple Inc. options by expiration – Google Finance.

I am tempted once again to invest seriously in AAPL leaps. So I found the following for January 2016:

– AAPL Call 100: $12.90 – great way to bet that Tim Cook and team will blow everybody’s minds off with their „best pipeline of products in the last 25 years” on Sept. 9 – and establish a new lucrative market

– Bull Call Spread 100/120: $6.75 – better way to bet on a moderate growth, with a break even at 106.75 in 16 months.

Also I would like to play a little amount on Oct out of the money calls just in case the pop is immediate after the announcement. But this is very risky, lotto style.

What do you think?

Anunțuri

3 comentarii

  1. 2016 100 leaps on aapl are far better than a bull spread. I owned both types for Jan 2015, and both the profit and the possibility to sell beforehand are much better. If aapl pops in April-June 2015 (considering the beginning of iwatch sales and record number of iphone 6 sales), the naked leaps will offer a direct profit, while for the spread, given the time constraint, it would be difficult to sell. A slowdown in the summer quarter until the next cycle and the obvious ‘s-line’ odd-years product refresh will likely contribute to a sell-off, hence the spread might end up worthless. However, the profits from the naked leaps will have already been in your pocket, and you might use them in other investments. For a riskier, but more profitable outcome, i would buy the June 2015 calls. No point in waiting for a great end of the year in 2015.
    As for this October, I would rather be neutral into the announcement. The market expects 2 types of iphones, some type of wearable, and even a new ipad air. For the past 2 years all rumors about new products have been correct, so unless tim cook made the iphone a hologram, or is wearing an iwatch as we enters the stage while driving an icar, or if the iphone will ship immediately and cost 400 dollars, i do not see any reason for a big pop.

    1. Respect bro! Very good analysis and smart ideas.

      I guess I’ll wait to see the iWatch before investing into the 2016 call, as the July 2015 AAPL 100 call is too expensive at $10.40 (vs $12.90 for Jan 2016) and it will have zero time value in July, versus some time value for the 2016 call.

      But following your advice I will strongly consider selling the call, or at least closing the spread by selling another higher call, by next spring.

      As for the short term gamble on a Sep 9 surprise, I really hope and somehow believe that the iWatch would be much more interesting than the Pebbles and Gears of late, and since there was no leak of it whatsoever, I hope that the market would be really impressed and start valueing AAPL at a higher multiple, at least closer to the market. So I’ll play the profits I’ll take from my current Sep 5 103/104 bull call spread into another high risk bet that the stock will pop by 4-5% a couple of weeks after the announcement.

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