Options Trading Opportunity with Apple

If you’ve been looking for an options trading play to make, check out this article about the current opportunity with Apple. With the results of their current launch, and the anticipated increased holiday sales coming before their next earnings report, this may be a perfect opportunity for you to consider.

I really struggled writing this article on Apple (AAPL) but I just cannot keep quiet about the opportunity I see here for the first quarter of 2012 for the savvy investor. Apple, I believe will offer an investor who is knowledgeable enough with options to make a very good trade.

No doubt, we all have read about the disappointment from AAPL for its third quarter earnings, coming in at $7.05 while analysts expected them to come in at $7.39. That is off a little bit more than a couple pennies. There may be reasoning behind this that makes sense. Could it be that Apple did not miss analysts, but the analysts missed Apple? Did Apple’s releasing of the new iPhone before they were set to report earnings make sales appear worse than they really were? It people loyal to Apple were waiting for the new product it makes sense that they would hold onto their money and not spend until the new product came out.

If this is true, then the potential for AAPL sales through the first quarter earnings announcements may be very great. Apple will make their announcement around January 18th and we may see a far different picture than we just saw. And if this is true, we are going to have a nice bullish drive up in the stock.

Just think about it, iPod and iPad sales are a good bet to rise due to the holiday season and this is ultimately a strong quarter for Apple in sales anyway, but it’s the coming high iPhone sales results that will probably surprise the market. During its weekend launch we all know that Apple sold 4 million phones in 3 days. It was the most successful sales launch for a consumer product ever and it was only a weekend. This is just the beginning of the 4th quarter, they have the best months still ahead of them.

Not only are the iPhones and other products going to raise their revenue through the roof this holiday season, but the Apple TV is coming to the market soon. This potentially has the ability to be huge for Apple. Jefferies’ Peter Misek thinks Apple could sell 5M TV sets at a $1,200 price tag in its fiscal 2013, and that the sales could boost Apple’s earnings for the year by $0.69-$1.03/share. Misek figures Apple will be able to entice a lot of people to pay more, so he figures Apple will have an initial addressable market of about 50 million units a year.

Analysts have Apple’s mean target price at $502.55. Now is a perfect time to position for January’s earning reports. A January 2012 500 call option is presently selling for $1.35. Buying a 500 and selling a 510 for $.97 gives us a debit spread of $.38. The November 500 is presently selling for $.10, this can give us a nice income and at the same time lower our debt by almost a third. As the stock moves up, more options selling should be able to bring in an income and about nullify any debit spread left. As an investor you will also be sitting comfortably for the January 2012 earnings reports.

See Seeking Alpha for the rest of the story

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