Call Options Or Put Options On Apple (AAPL)?
Apple (AAPL) develops mobile communication and media devices, personal computing products, and portable digital music players. Not to mention, the company is one of the biggest and most popular on the planet.
AAPL shares are currently trading for $418.99. The stock’s down roughly 20% for the year. The shares are 10% above the 52-week low of $382.57 and are 40% below the 52-week high of $693.21.
Is this an opportunity to buy call options on AAPL with the company beating expectations for both earnings and revenues? Or should you buy put options on AAPL with the lack of a new product on the horizon?
The bulls make a convincing argument…
The naysayers have been talking down on Apple for months now. But, it appears they don’t have much ground to stand on.
The company just released earnings and beat expectations on both revenues and earnings. That’s hardly a doomsday scenario.
More importantly, AAPL sold a whopping 31.2 million iPhones for the quarter. That’s well above analysts’ expectations of 26.5 million. And, it was the area critics were most concerned about.
Clearly, intense competition in the smartphone space hasn’t diminished Apple’s immense popularity. The company still seems to have plenty left in the tank.
But the bears have a compelling case as well…
On the other hand, Apple still hasn’t announced a new and exciting product for this year. There’s only so much traction a company can gain with minor changes to existing products. As such, customers are going to be expecting something worth waiting for in 2013.
While iPhone sales have done well, demand for the product will certainly diminish if no exciting changes or upgrades are made in the near future. Moreover, iPad sales are actually down from the previous year.
Once again, if Apple can’t develop the next killer product, will customers keep coming back to the well?
So is AAPL’s earnings and revenues beat enough to overcome the lack of a new product?
If you think the bulls are right, take a look at buying the AAPL August $450.00 calls for around $3.00.
If you think the bears are right, take a look at buying the AAPL August $380.00 puts for around $2.00.
Note: Option prices could change dramatically from these levels by the time this has published.
Yours in Profit,
Gordon Lewis
Category: Call Or Put Options?
