“It could be a good time to place bets on Apple,” Alex Rosenberg reports for Bloomberg. “Goldman Sachs’ options team points out that Apple options prices are very low, especially when compared with S&P 500 options.”
“Since they believe there is a higher chance of Apple shares making a big move than the market currently appears to expect, Goldman strategists Katherine Fogertey and John Marshall recommend the purchase of a ‘straddle’ on Apple, which is a trade that entails purchasing both a bullish and a bearish option in order to play for a move to either the upside or the downside,” Rosenberg reports. “A less expensive strategy would be to simply bet on either a rise or a fall, by buying a call or a put.”
“Either way, the options market’s opinion about Apple certainly does appear to be shifting,” Rosenberg reports. “An examination of data provided by FactSet shows that the implied volatility (a measure of expected future moves that is computed from options prices) of Apple shares compared with those of the SPDR S&P 500 ETF has fallen dramatically in recent years.”
Read more in the full article here.
MacDailyNews Take: It never ends.
Buying options is a losing proposition as their value decays with the passing of time. It figures that these guys would recommend those strategies, as they can take the opposite side, and selling options is much more profitable than buying them. Selling is the way to make money.
More like it’s time to watch Apple fall, like a senior citizen with a bad hip!
Even the investment banks tell you what the stock market is, a place to gamble.
There was a study done years ago where pins or darts were thrown at a stock market page, where the dart hit, those stocks were followed and compared to what the professional were telling people would be a good, great investment… I think the dart throwing did as well as the professional. ( There maybe a few of you old enough to remember this )
So you may as well pick a stock base on its company colors as well as listen to these investment bankers about what to buy. At least throw some darts at the stock page first. It cost you much less then their advise.
Excellent advice that everyone should follow. And I’m going to buy stock in companies that make darts.
Don’t forget the stock-picking monkeys, too. They also did better than the pros: http://www.forbes.com/sites/rickferri/2012/12/20/any-monkey-can-beat-the-market/#3bdf67d96e8b
Apple is a buy and hold stock. Most people with big portfolios already have it. The problem is, stock brokers don’t make money unless you keep trading. So they do everything they can to convince people who already own Apple stock to dump it and free up the cash for other trades. Then, of course, they try to switch gears and tell people to buy it back. Only idiots follow this advice. Unfortunately, there are lots of idiots in the world.
Goldman says?
Well, believing what a gangster Bank says is rubbish.
America believes in Banks that stole the future of their children.
Fox News seems to work pretty good.
Vampire Squid says it’s time to buy AAPL. Does that mean it’s time to pile in or time to run?
You know the voice in your head is telling you to buy this stock. No wait. It’s just the idiots who run MDN.
Much a say about nothing…. Sigh…
GS wants to sell you that spread. Lower Volatility indicates market expects Apple to be range bound, so you premium goes to zero and GS pockets the premium.
Can’t think of GS call on Apple that was proved right 3 months later.
These people can’t be trusted, but I’m in favor of hearing anything that doesn’t involve Apple being doomed. I’m not sure what exactly is going to allow Apple to gain respect on Wall Street apart from selling a 100 million iPhones every quarter.
If you people don’t like the GS recommendation, then of course you are free to do the opposite and sell the straddle, that’s what makes a market.