“In the second-straight day of heavily bullish options buying in Apple, one major investor appears to be betting nearly $60 million that Apple shares will rise above $700 by October,” Alex Rosenberg reports for CNBC. “In one of Wednesday morning’s largest options trades, 20,000 Apple 675-strike call options were traded for $21.30 per share. Since each call contract gives an investor the right to buy 100 shares at a set price within a set time, this amounts to a $43 million wager that the stock will trade above $696 by Oct 17.”
“In addition, the same trader appeared to buy 10,000 October 700-strike calls for $14.75 each,” Rosenberg reports. “This is essentially a $15 million bet that Apple shares will rise above $715 by that same expiration date. That would exceed Apple’s all-time high of $705, which it hit in September 2012.”
“It’s worth noting that while Apple’s shares are about to split 7-for-1, the strike prices will automatically be adjusted for this split,” Rosenberg reports. “So each 700-strike option will become seven 100-strike options. Apple’s all-time high on a split-adjusted basis is about $101.”
Read more in the full article here.
To be exact, Apple’s all-time high is $705.07, set during trading on September 21, 2012. After the split takes effect on June 9th, Apple’s split-adjusted all-time high will stand at $100.72.
[Thanks to MacDailyNews Reader “Lynn Weiler” for the heads up.]
That can’t be. I thought I was the last believer in AAPL.
Who knew!
AAPL will blow past those points long before October!
Once the split takes effect it will be the small money that moves AAPL.
Remember what happened to you last time. You’ll never learn will you?
“Betting” is the operative word here.
In the words of Bob Dylan, “Don’t follow leaders, watch your parking meters.”
Not to worry. Jony’s in the basement mixing up the medicine.
Wow. How appropriate.
Mind = blown.
Long money always knew that.
Patience. That is one of the most important attributes any investor can have. Hitting a new high would be great. But I have no interest in selling my Apple shares any time soon, and for that reason, all this does not matter to me.
For the past few years, we’ve seen a lot of noise about Apple, about how the company was not what it was, that it had lost its way, yada, yada, yada. Pure noise.
Yes, earnings growth has slowed, and that hardly surprises me. To have maintained such an incredible rate of earnings growth for such a large company is almost impossible. Pundits will never understand that companies don’t invent on command, and that it can take many years to develop new category-creating or category-disruptive products. The software announcements this week have likely been in development for years. But if you’re not a developer or a product designer, you will never understand that.
What has not changed is Apple’s ability to generate cash, which continues unabated. In the end, that is what determines a company’s value. I believe that the dip in Apple’s stock valuation for a few years was not from declining earnings or cash flow growth, but merely sentiment, the perception of how a company is performing rather than how it is actually faring.
So in the face of “bad” news these past few years, the market’s misplacing of Apple has given investors a rare opportunity: to buy shares of an outstanding company at a bargain price. I hope you did that.
As for me, I have bought and held tight. I have reinvested every penny of my dividends, and watched the value of my Apple shares grow from that, and now, from price appreciation. I will hold tight as long as the company continues to perform well, and I know that 20 years from now, my patience will be rewarded, and that all the noise, rancor, lies, hype and garbage spewed by the Henry Blodgetts of this world will come to nothing.
Patience. If you are going to invest, it can be your sword and shield.
You seem to have chosen completely the wrong article to make your comment. I have no clue who you’re aiming your “patience” advice at. The person(s) who made the “big money bet” on the options contracts, I assume? If yes, you don’t seem to understand how options work. The big money trader referred to in this article does not necessarily lack patience. He just knows of a smart way to multiply his money many times over. You apparently own shares in AAPL. AAPL went up 1.14% to $644.82 per share. So presumably your AAPL investment went up 1.14% today, yes? Like this unknown big-money-bet trader, I’ve placed a bet on AAPL with options contracts. My entire investment portfolio consists of AAPL options that have a $700 strike price, mostly with a Jan 2015 expiration date. AAPL was up 1.14% today. My portfolio was up 18.70% today. The trader from the article isn’t necessarily impatient. He’s just swinging for the fences and knows how to multiply his money instead of buying shares outright for a smaller gain. He could see a 2x or 3x or 4x or higher gain on his options bet between now and October, without the share price having to go up by 2x or 3x or 4x. I don’t think AAPL is going to hit $2,579.28 (4×644.82) by October. And it doesn’t need to for this guy (and for me) to quadruple his (our) investments. It doesn’t even have to hit $800 by October for that to happen. So your patience lecture doesn’t really make sense here..it seems like you were just ready and waiting for a chance to talk about your own investment philosophy, and misguidedly picked this article. Weird.
Trying to explain options investing around here is futile. If you aren’t holding shares forever, how smart has that been in the past 20 months, you are evil. Just as the entire world and Wall Street is against Apple investors, so are option investors. Or so these people here believe. And God forbid if you should ever buy puts! Puts are part of the conspiracy of Wall Street to crush Apple. Everyone here knows that. But they are all giddy now as Apple makes its way towards $700 again. And when it drops, as all stocks eventually will, they will lose their asses and blame Wall Street. Then they will claim that they are dividend investors. Few if any are able to invest rationally as an adult. Few if any are able to separate investing from cult worshiping. They should simply invest in mutual funds. A much better buy and hold investing(?).
It’s probably Botty showing his faith in Tim Cook.
I’ll gladly take that bet. Time to make a call and put a few thousand into those options.
The problem with someone making big bets on Apple reaching 700 is that others will be trying to drag the price down for max pain. OR the same trader will try to offload them before Oct and screw those he sold them to.
The only good news is that the options are going to mature until Oct. The stock should go up for while until the big guys create the conditions to drag it down.
I’m tempted to sell some of my aapl when it gets to around $700 since I’m pretty sure it will get knocked down again and buy back it when it hits bottom.
“Listen, here’s the thing. If you can’t spot the sucker in the first half hour at the table, then you ARE the sucker.”