Call Options Or Put Options On Apple (AAPL)?
Apple (AAPL) is the world’s largest public company. Of course, we’re all familiar with the company’s ultra-popular products, especially the ubiquitous iPhone.
AAPL shares are trading at $494.64 after dropping over 2% yesterday. The stock’s up 30% from the 52-week low of $380.06 and is 28% below the 52-week high of $688.66.
Is this an opportunity to buy call options on AAPL with the company’s introduction of two new iPhones? Or should you buy put options on AAPL because investors were hoping for something more exciting?
The bulls make a convincing argument…
The big news yesterday was Apple’s unveiling of their much-anticipated, new iPhone lineup. The two new products include a cheaper iPhone 5C and a fancy, normally priced iPhone 5S.
The 5C gives Apple the opportunity to break into new markets, both in the US and overseas. The cheaper price tag could help the company gain traction with a more cost-conscious crowd.
In the meantime, the 5S has some snazzy new features (like a fingerprint scanner) and could spark long lines come launch time. The original iPhone 5 didn’t come with as much buzz as its predecessors – yet it still is the best selling iPhone ever. The 5S actually seems to be attracting that crucial hype – and could really do wonders for sales (and profits) this time around.
But the bears have a compelling case as well…
AAPL shares fell over 2% after the conference as many investors were hoping for bigger news. The new iPhones simply met expectations – but nobody was the least bit surprised.
Where’s this supposed iWatch everyone’s been waiting for?
More importantly, will Apple’s latest iteration of the iPhone be able to push them into a more competitive race with Google’s (GOOG) Android-based phones? The new phones may have some cool features, but they don’t seem like game changers.
So are Apple’s new iPhones enough reason to bet on the stock going higher, or are consumers going to greet the new products with relative indifference?
If you think the bulls are right, take a look at buying the AAPL October $550 calls for around $3.50.
If you think the bears are right, take a look at buying the AAPL October $450 puts for around $3.50.
Yours in Profit,
Gordon Lewis
Category: Call Or Put Options?
