“Apple Inc. shareholders should use bullish options to boost returns because shares… may climb in the next four months on increasing smartphone and Macintosh computer sales, Credit Suisse Group AG said,” Jeff Kearns reports for Bloomberg.
“Equity derivatives strategist Sveinn Palsson recommended shareholders use a “call spread” strategy, buying a January $180 call and selling two January $200 calls, both of which expire Jan. 15,” Kearns reports.
“Credit Suisse analyst Bill Shope raised his share-price forecast to $200 yesterday from $175… He kept his ‘outperform’ rating on the shares, which peaked at $199.83 in December 2007,” Kearns reports. “‘This trade will double the returns on Apple between $180 and $200,’ Palsson wrote. ‘Should Apple advance to $200, one stands to earn returns as if it had advanced to $220.'”
Kearns reports, “Options are derivatives that give the right to buy or sell a security at a set price and date. Investors use options to guard against fluctuations in the price of securities they own, speculate on share-price moves or bet that volatility, or stock swings, will increase or decrease.”
Full article here.
[Thanks to MacDailyNews Readers “Judge Bork” and “Carl H.” for the heads up.]