Apple options traders bet new products will bring stock surge

“Options traders are betting new Apple Inc. products will propel the world’s largest company after it rebounded from the worst monthly loss in a year,” Trista Kelley and Namitha Jagadeesh report for Bloomberg. “Options on the iPhone maker haven’t been this cheap in more than two years relative to the Technology Select Sector SPDR Fund, according to data compiled by Bloomberg. The stock lost 4.3 percent last quarter, including an 11 percent retreat in January, while the exchange-traded fund advanced 1.7 percent between January and March for a fifth straight gain.”

“Investors are betting a range of new products this year will sustain a sales boom and help keep the stock afloat, said Andy Perkins, an analyst at Societe Generale SA in London,” Kelley and Jagadeesh report. “Apple will introduce a TV set-top box and is negotiating with Time Warner Cable Inc. and other potential partners to add video content, people familiar with the plans said in February. The company also is exploring a smartwatch, people familiar with those plans have said. ‘We’re going to see quite a bit of new products,’ said Perkins, who recommends holding the stock. ‘Perhaps we’ll see bigger screen phones, we might see more than one phone launched in the year, or one of these big products that so many people talk about: the iWatch or the iTV.'”

“Apple traders own more bullish options than bearish ones,” Kelley and Jagadeesh report. “There were 1.22 million calls giving the right to buy the stock, 40 percent more than puts to sell, according to data compiled by Bloomberg as of April 1. Eight of the 10 most-owned contracts were bullish, with calls betting on a 9 percent jump to $590 by April 19 having the largest open interest, the data show.”

Read more in the full article here.

4 Comments

  1. Considering how much Apple is earning , if the new product can’t make Apple grow again , no matter how innovative the new thing is , Apple is destined to drop .

  2. “with calls betting on a 9 percent jump to $590 by April 19 having the largest open interest, the data show.”
    You guys are so cynical about the article. I much rather believe Kelley and Jagadeesh report.

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