AAPL Sept 9 Event

[dbh21 62]

Apple has a big event Sept 9 where they plan on announcing the iphone 6 and something related to wearable devices. The news seems to indicate that they have raised the bar so they need to have a big announcement. Personally I think the iwatch is kind of lame, and I hope its something more.

 

But the question is whether to and how to trade this event. 

 

I have 3 other AAPL events for the initial iphone, ipad, and iphone 5. Just like my other charts, I treat these the same:

 

Straddles:

(Please ignore the current IM... its is incorrect. The correct value is ~4%)

 

 

 

In general, straddles before the event performed poorly. After the event, the closest expiration straddles performed well for the iphone5 and ipad events.

 

 

DoubleCalendars

 

 

 

Calendars bought 2-3 days before the event, sold the day of, seemed to perform well (between 5-30% returns). Calendars look cheap now too. I calculate a RV (dblcal mid/spot) of ~1.5%... way below the historical values.

 

AAPL is usally a pretty poor candidate for earnings, but this quick calendar trade might look decent if the value stays cheap. I might also hold a small straddle through the event (total speculation).

 

Anyone playing this event?

 

[Vancouver 54]

Yes, I bought a double calendar spread on Friday (wanted to have the long weekend theta). Long Oct 17, Short Sep 12.

Got the Call 105 spread for 1.19, and the Put 100 for 1.15.

Seems to be doing well so far.

[Yowster 9,849]

Based on the charts, I'm looking to enter a calendar trade on Thursday.  However, the much publicized iCloud hack this past weekend is another thing to factor in.  I was expecting AAPL stock to drop this morning after all the media attention the iCloud hack got, but given that AAPL is up around a dollar I'm not sure what or how much of an effect this will have over the next few days.

[dbh21 62]

I don't think the iCloud thing will effect it much. My understanding is that it was not an exploit on iCloud but lots of individual people hacking celebrity accounts over a long period of time. 

[Yobryan 22]

Hi Dustin, 

 

I am interested in trading this event. Thanks for your analysis. Would you mind sharing your specific trades when you choose to enter?

 

Thanks,

Bryan

[bam1960 53]

I have not decided how I will play this one, I own the stock and will buy some weekly puts as cheap as possible before announcement. I am thinking a bearish call spread just before launch. 

[bam1960 53]

May be a broken wing butterfly its just very commissions consuming

[bam1960 53]

Right or wrong I opened up Sept.2 98/100/101 calls, broken wing butterfly @.65 debit. 

[dbh21 62]

I'm humming and hawing this. The DC seems a tad expensive to me. I should have got in earlier... but then there was that big move yesterday.

[bam1960 53]

AAPL is acting completely counter to past announcements. 

[Yowster 9,849]

I'm sorry I didn't open the calendar... The one week Sep12/Sep19 100 call calender was at 0.30 last week and at 0.45 today.   I'm not sure how the calendars with multiple weeks between the short and long legs performed, but even with the commissions effecting the cheaper spread this would have been a nice gain.

[dbh21 62]

I tried to open calendars, but they didn't fill at my price. I have a couple cheap long calls as I am hoping they are going to step up their game and do something really cool (its been a while and google is totally kicking their ass in the cool category).

[Vancouver 54]

The Long Oct 17, Short Sep 12 spread trades reasonably well.

The Put 100 I got for 1.15 is around 1.40 now, and the Call 105 spread I got for 1.19 is lower, around 1.00

I added a Put 95 spread yesterday at 1.05 when the stock crossed the $99 mark. It is at 1.20 or so now.

 

So overall not too bad. Plan to exit before noon tomorrow...

[Yowster 9,849]

IV dropped now that details are out... Any sort of ATM calendars short this week's series and long some other series wound up as big winners after the IV drop.