Option Trade
Apple Inc. (NASDAQ:AAPL) Calls
Thursday, September 07, 2017

** OPTION TRADE: Buy the AAPL OCT 20 2017 170.000 CALL at approximately $2.30. Place a pre-determined sell at $4.60.

Note: No protective stop losses added -- but if you wish to do so make it $0.90.

Also Note: This is a recommendation and individual members can use their own discretion as to when to enter or exit!

You may also wish to read Stock Options Made Easy Trading Philosophy

by Ian Harvey   

Tech heavyweight Apple Inc. (NASDAQ: AAPL), a company that designs, manufactures and markets mobile communication and media devices, personal computers, and portable digital music players, and a variety of related software, services, peripherals, networking solutions, and third-party digital content and applications, will launch iPhone 8 next Tuesday.

Apple stock has surged by about 50% in the past year and investors shouldn't count on a pullback anytime soon. The new flagship iPhone could potentially drive a huge acceleration in Apple's revenue growth -- as was the case three years ago with the iPhone 6 family. If that occurs, the stock price could just keep rising.

Apple stock saw its price target raised to $185 from $175 by analyst Jeffrey Kvaal at Nomura Instinet ahead of next Tuesday's iPhone 8 reveal. The brokerage firm waxed optimistic on demand for the new phone, and said it should be "cool enough to sell at ~$1,000."

"Apple is entering the long awaited iPhone supercycle on its front foot, in our view," Kvaal wrote in a note to clients. "We look forward to Apple's launch even on September 12th."

Apple is expected to unveil new 10th-anniversary iPhones with new features including edge-to-edge OLED display and facial recognition.

Past experience shows that the current iPhone slowdown could quickly give way to strong growth. Unit sales growth will likely return to double-digit territory, once Apple resolves any initial supply constraints; as there is massive pent-up demand for new iPhone models. Moreover, the average selling price (ASP) will soar, as the flagship iPhone 8 model may have a starting price around $1,000.

Indeed, during fiscal 2015 -- which began immediately after Apple began selling the iPhone 6 and iPhone 6 Plus -- iPhone unit sales surged 37% year over year, while iPhone revenue skyrocketed by 52%. In the prior year, iPhone revenue had increased by just 12%.

Thus, iPhone revenue growth accelerated by a stunning 40 percentage points after Apple's last major iPhone revamp. While the base growth rate for the iPhone product line is lower now, it's still entirely possible that iPhone revenue will grow by 30%-40% in the upcoming 2018 fiscal year.

Meanwhile, Apple's other product lines are set to contribute to the company's revenue growth in the next year. Last quarter, Apple's non-iPhone revenue increased by 12% year over year; in the prior quarter, it rose by 11%.

If this pace continues, Apple's non-iPhone revenue could increase by nearly $10 billion in fiscal 2018. Sales growth for Apple's other products could also accelerate, if a surge in iPhone sales drives faster growth for the App Store and more accessories purchases. Additionally, the new HomePod smart home assistant is scheduled to become available in December.

Summary

On July 31 I recommended that you execute a trade on Apple, which has now produced a profit of 100%. This could be an opportunity to benefit once-again from Apple’s upward movement.

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

 ** OPTION TRADE: Buy the AAPL OCT 20 2017 170.000 CALL at approximately $2.30. Place a pre-determined sell at $4.60.

Note: No protective stop losses added -- but if you wish to do so make it $0.90.

 

 ”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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