Apple (AAPL), in a much-anticipated release, unleashed the iPhone on consumers last Tuesday. The Washington Post reported even the most avid enthusiasts were surprised by the features of the new phone saying it was better than expected.
Audio Podcast:
An audio podcast of this article is available at: poweropt.com/podcasts/2007_01_11_APPLE.mp3
News Roundup:
In a special report the English financial publication, the Guardian reported, “The launch of Apple’s iPhone sent shockwaves across the rest of the technology industry yesterday as the race started to bring the Silicon Valley giant’s latest gadget to Britain later this year.”
CNet.com, the popular tech review site, postulated the phone’s beauty might only be skin deep. The site said in a January 10 post, “Tuesday’s introduction of the iPhone at MacWorld was long on glitz, but short on details. Little is known about the technical workings of the iPhone. There are also a lot of questions about Apple’s entry into a tentative market full of large companies far more established than the MP3 player firms that got flattened by the iPod.”
Blog Opinions:
The site bloggingstocks.com has a link to the CNBC video clip of an interview with Steve Jobs. The video starts out with Steve Jobs hawkishly peddling the iPhone, but ends with him expressing his frustration with the press’ fixation on his backdated stock option woes.
Many blogs focused on how Apple was able to keep the phone a secret for such a long period of time. Other blogs covered, in tech geek minutia, the features of the new phone. The main complaints revolve around the poor battery life and the phone exclusively using the Cingular network.
Other blogs focused on Cisco’s lawsuit with Apple over the iPhone name. Cisco registered iPhone is a trademark in 2000.
Competitors:
Competitors for AAPL include: Dell Inc. (DELL), Hewlett-Packard Co. (HPQ), Microsoft Corp. (MSFT), Adobe Systems Inc. (ADBE), Avid Technology Inc. (AVID), Creative Technology Limited (CREAF), DivX Inc. (DIVX), Gateway 2000 Inc. (GTW), Napster Inc. (NAPS), RealNetworks Inc. (RNWK), and Sonic Solutions (SNIC).
Potential trades:
Apple jumped nearly 7% on Tuesday and nearly 5% on Wednesday. An investor might ask how much more can stock possibly gain? Well, if news of the phone sales is cheery a covered call might be a good bet. Also, if previously success is any indication of future success, we covered Apple option trades in a previous blog article and the selected positions returned between 2 and 13% “Apple (AAPL) & Microsoft (MSFT) Returns +3.2% in Nov.”.
| Covered Call – Apple Computer Inc. (AAPL) $ 97.00 (38) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Inch. |
% If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| QAABR | 07 FEB 90.00 | $9.60 | 9.90% | 3.00% | 3.00% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| QAABS | 07 FEB 95.00 | $6.40 | 6.60% | 4.90% | 4.90% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| QAABT | 07 FEB 100.00 | $3.90 | 4.00% | 4.20% | 7.40% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The first covered call trade, an in-the-money covered call, offers rock solid 9.9% downside protection and a potential profit of 3.0% (38 days) if the stock remains unchanged or rises.
The second covered call trade, also an in-the-money covered call, offers 6.6% downside protection and a potential profit of 4.9% if the stock remains unchanged or increases.
The third covered call trade, an out-of-the-money covered call, offers 4.0% downside protection and a potential profit of 4.2% if the stock remains unchanged. If the stock rises above the QAABT option’s strike price of $100.00, the investor walks away with a tidy 7.40% profit.
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[tags]iPhone, Guardian, Silicon Valley, Britain, Washington Post, CNet.com, MacWorld, iPod, bloggingstocks.com, CNBC, Steve Jobs, Cingular, Cisco, AAPL, Apple Computer Inc., ADBE, Adobe Systems Inc., AVID, Avid Technology Inc., CREAF, Creative Technology Limited, DELL, Dell Computer Corp., DIVX, DivX Inc., GTW, Gateway 2000 Inc., HPQ, Hewlett Packard, MSFT, Microsoft Corp., NAPS, Napster Inc., RNWK, RealNetworks Inc., SNIC, Sonic Solutions, covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options[/tags]