Option Trade
Apple Inc. (NASDAQ:AAPL) Puts
Tuesday, January 26, 2016

**OPTION TRADE: Buy the AAPL Apr 2016 100.000 put (AAPL160415P00100000) at approximately $6.00. Place a pre-determined sell at $12.00.

Note: No protective stop losses added -- but if you wish to do so make it $2.40.

by Ian Harvey

January 26, 2016

Apple Inc. (NASDAQ: AAPL), the tech giant, is expected to post revenues of $76.67 billion and earnings of $3.23 per share, compared to revenues of $74.60 billion and earnings of $2.60 per share from the same quarter of last year today, after market close.

Apple is expected to report iPhone sales increased slightly more than 1 percent in the holiday quarter, its slowest growth ever and far from the double-digit growth investors have come to expect.

The iPhone 6S and 6S Plus, which boasted record weekend sales when they launched in September, are now facing weak demand, according to analysts, because they have fewer distinguishing features than their popular predecessors.

The new iPhones also face tough comparisons with the strong sales of their older siblings.

Apple shares closed down 1.98 percent at $99.41 on Monday. They have fallen nearly 10 percent since the start of October, steeper than a 2.2 percent decline in the S&P 500 index .SPX.

It appears that Apple has become a victim of their own success as the blockbuster iPhone 6 product cycle was hard to replicate, and it has been reported that many customers are either buying an older, cheaper iPhone 6 or waiting for the iPhone 7.

China, the company's fastest-growing market, may also have weighed on first-quarter results, as a slowdown in the country's economy forced consumers to tighten their purse strings.

Analysts estimate Apple sold 75.5 million iPhones in the October-December quarter, a 1.3 percent increase from a year earlier, according to research firm FactSet StreetAccount.

This compares with a nearly 46 percent year-over-year jump in iPhone sales in the first quarter of 2015. The slowest growth in quarterly iPhone sales so far has been 6.8 percent, in the second quarter of fiscal 2013, according to data from Statista.

To make matters worse, Apple is expected to forecast a drop in iPhone sales for the March quarter – the first time that sales will fall since the iPhone was launched in 2007.

Harvey’s Options Volatility Indicator

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

**OPTION TRADE: Buy the AAPL Apr 2016 100.000 put (AAPL160415P00100000) at approximately $6.00. Place a pre-determined sell at $12.00.

Note: No protective stop losses added -- but if you wish to do so make it $2.40.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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