“Investors are hoping that Apple Inc will unleash some of its old magic when it takes the wraps off its latest iPhone on Tuesday, with many building bullish share and options positions,” Poornima Gupta and Doris Frankel report for Reuters. “In the past two weeks, Apple investors have bought almost twice the number of call options than puts on three major U.S. option exchanges.”
“Apple on Tuesday is holding a media event at its headquarters in Cupertino, California, where it is expected to launch an updated iPhone model – widely referred to as the iPhone 5S – as well as a cheaper version of the device dubbed the iPhone 5C,” Gupta and Frankel report. “Investors are hoping that in addition to the phone unveiling, the company will also announce it has finally penetrated the world’s largest wireless carrier China Mobile Ltd , which has over 740 million users.”
MacDailyNews Take: Heh, heh, they said “penetrated.”
Gupta and Frankel report, “Jefferies analyst Peter Misek expects choppy trading of Apple shares following the event as he expects ‘lackluster’ sales of the phone. ‘Lack of differentiation, elongating replacement rates, and smartphone growth shifting to the very low-end below the iPhone 5C price point’ are the negatives, he said.”
MacDailyNews Take: iCal’ed.
Gupta and Frankel report, “While many options investors are taking an optimistic view, expecting Apple to build on recent gains that have driven the stock up nearly 25 percent since the end of June, some analysts cautioned the market may be overpricing expected volatility in Apple shares. Ryan Detrick, senior technical analyst at options research firm Schaeffer’s Investment Research in Cincinnati, Ohio, said that in the past 10 trading sessions beginning Aug. 23, investors bought 1.98 call options on Apple compared with every put option purchased as a new position, citing data from three major U.S. options exchanges. That call-to-put ratio is higher than 94 percent of the readings over the past year, he said. ‘This optimism sets a rather high bar and any disappointment could lead to profit taking or selling,’ Detrick said.”
Read more in the full article here.