Much has been said about the new phone and the response on the surface seems exactly how you would expect it to be. Regardless of what Apple really released the euphoria would have been immense, consumers were lining up to buy the phone for months, and so despite the fact that's its been slow to catch up with the competition in regards to screen size and other features, it was always going to be a massive seller.
The cult like following of Apple and its products is the dream position of any company. The fact they can release products of similar specs to the competition yet still command such a big premium in price, and have people queue up and have savings ready to buy these overpriced phones is the promise land. Demand is very inelastic with Apple, so regardless of the price demand will be huge. They could have charged over £1000 for the phone and it would still crash websites and cause mass euphoria.
While Apple have this ability to charge premium for their products, and the fact they don't need to discount at all, can only mean its great to be a shareholder. It is likely that their cash pile is going to grow massively and sales beat records as the higher priced phones will obviously add to the top and bottom line.
So whilst I would not buy an Iphone since I don't think its a good deal at all, and much better value and innovation is found in Androids and to some expect Windows phones,(in my opinion) I would however go long their stock, since the model of massively loyal customers coupled with very premium prices is likely to support the stock price going forward into the Christmas season.
Because of this I am looking for bullish strategies on any pullback. Rather then buying the shares I prefer to sell premium, combined with long call positions.
Going long the Oct 102.14/112.14 Call Spread, and financing that a bit by selling a 97.14/92.14 Put Spread would cost roughly $1.60, which is 160$ per contract for a max profit of 840 dollars, but loss will be limited to 160 dollars if it doesn't fall below 95.64 at expiry. I prefer playing this way as its better margin wise as you can control more shares with much less investment and, also always protect yourself to the downside since nothing is guaranteed. However with the market the way it is, low rates, and the hunger for Yield, for the time being, being long is the best way to go.
The cult like following of Apple and its products is the dream position of any company. The fact they can release products of similar specs to the competition yet still command such a big premium in price, and have people queue up and have savings ready to buy these overpriced phones is the promise land. Demand is very inelastic with Apple, so regardless of the price demand will be huge. They could have charged over £1000 for the phone and it would still crash websites and cause mass euphoria.
While Apple have this ability to charge premium for their products, and the fact they don't need to discount at all, can only mean its great to be a shareholder. It is likely that their cash pile is going to grow massively and sales beat records as the higher priced phones will obviously add to the top and bottom line.
So whilst I would not buy an Iphone since I don't think its a good deal at all, and much better value and innovation is found in Androids and to some expect Windows phones,(in my opinion) I would however go long their stock, since the model of massively loyal customers coupled with very premium prices is likely to support the stock price going forward into the Christmas season.
Because of this I am looking for bullish strategies on any pullback. Rather then buying the shares I prefer to sell premium, combined with long call positions.
Going long the Oct 102.14/112.14 Call Spread, and financing that a bit by selling a 97.14/92.14 Put Spread would cost roughly $1.60, which is 160$ per contract for a max profit of 840 dollars, but loss will be limited to 160 dollars if it doesn't fall below 95.64 at expiry. I prefer playing this way as its better margin wise as you can control more shares with much less investment and, also always protect yourself to the downside since nothing is guaranteed. However with the market the way it is, low rates, and the hunger for Yield, for the time being, being long is the best way to go.
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