This guy is taking a crazy bet on Apple earnings...

Discussion in 'Apple, Inc and Tech Industry' started by stargazervega, Jan 22, 2015.

  1. stargazervega macrumors newbie

    Joined:
    Jan 22, 2015
    #1
    http://www.fscomeau.com/31200-calls-apple/

    Basically, he's taking a bet that Apple's earnings on Jan 27th are going to be "phantasmagoric" to take his own words.

    He bought call options. If he is wrong, or if anything happens and the stock crashes, he loses $31,200. If he is right however, he could make a $100,000+ profit.

    Crazy!
     
  2. nebo1ss macrumors 68030

    Joined:
    Jun 2, 2010
    #2
    I think he could make a little money on this trade. However, to make $100,000 the stock would have to go to $123. The exercise date is February 20 and there is a Dividend due in early February. Stocks normally fall back a little after Dividend date.

    I wish him well.
     
  3. stargazervega thread starter macrumors newbie

    Joined:
    Jan 22, 2015
    #3
    More or less. Say the stock is at $118 the day after earnings. Then by the black-scholes model, his option will be worth $11.32. $11.32-$3.12 =$8.2, so $82,000 total.
     
  4. nebo1ss, Jan 22, 2015
    Last edited: Jan 22, 2015

    nebo1ss macrumors 68030

    Joined:
    Jun 2, 2010
    #4
    Not sure I agree with the Math. If the price is $118 then each one is worth $8,00 in other words he can buy the stock for $110 and Sell it for $118 a profit of $8. You then have to deduct the price he paid of 3.12 makes a profit of $5 per call or $50,000.
     
  5. UAV macrumors regular

    Joined:
    Jan 11, 2015
    #5
    he should have just bought bitcoins. in the last 48hrs they went from 198.00 to the current price of 230.00 sure he will make a decent profit off of apple if the stock does hit 120+ but he's not gonna get rich off it. he can make much more $$$ with bitcoins without the months of waiting
     
  6. smithrh macrumors 68020

    smithrh

    Joined:
    Feb 28, 2009
    #6
    A hahahahahahahahahaha

    hahahahahaha

    stop it dude you're killing me!
     
  7. UAV macrumors regular

    Joined:
    Jan 11, 2015
    #7
    yea i know the truth hurts. but you can't argue with math. the numbers don't lie.
     
  8. mobilehaathi macrumors G3

    mobilehaathi

    Joined:
    Aug 19, 2008
    Location:
    The Anthropocene
    #8
    Numbers neither lie nor tell the truth. They're simply numbers.
     
  9. Solomani macrumors 68030

    Solomani

    Joined:
    Sep 25, 2012
    Location:
    Alberto, Canado
    #9
    Risky bet. In the past, even when Apple earnings blow away Wall Street estimates, the stock price still somehow drops (usually within a couple days after the earnings report).

    Apple really is one of the unpredictable stocks in terms of day to day performance in NASDAQ. You have good news and the stock can plummet. You have bad news and the stock holds. Overall, it's a decent stock for gradual long-term growth. But if you do daily trades, the odds are worse than playing in Vegas.
     
  10. gnasher729 macrumors P6

    gnasher729

    Joined:
    Nov 25, 2005
    #10
    He should have bought bitcoins a few months ago, and they would have dropped from over $1000 to $230 :D (I find the whole idea behind bitcoin absolutely disgusting). Bitcoins had a massive, massive drop in value, followed by a slight increase. And that doesn't even take into account that you could have been the victim of one of several huge scams where you would have lost everything.

    What this guy is doing is about the same as taking $30,000, going to a high roller roulette table in Las Vegas, and betting all the money on two sets of four numbers. You are most likely to lose, but if you win, you win quite big.

    So I think you didn't quite get that he didn't buy shares, but call options.

    (However, the guy justified his bet by saying he thinks Apple is severely undervalued. That's a very bad justification. If Apple is severely undervalued today, it is most likely that it will be severely undervalued by end of February).

    ----------

    The math is alright. At $118, you can turn each option into $8 profit. But that is just one possibility, He can think hard about the share price and decide to keep the options a bit longer if he thinks the shares go up further, and because he can make the decision, the value of the option is higher.
     
  11. UAV macrumors regular

    Joined:
    Jan 11, 2015
    #11
    wow another 20.00 gain per bitcoin current price 250.00 apple still stuck at 113.00 lol...good luck with that bad apple stock it's gonna take months before it even see's 200.00
     
  12. elistan macrumors 6502a

    Joined:
    Jun 30, 2007
    Location:
    Denver/Boulder, CO
    #12
    Ah, the ol' pump-and-dump, eh? You must have bought recently, when it was above $300? Bummer.

    Anyway, AAPL is doing well today, around $117. So he can make a tidy profit today if he wanted. Sounds like he's looking for it to go even higher though.
     
  13. UAV macrumors regular

    Joined:
    Jan 11, 2015
    #13
    sounds like your the one pumping. apple stock is not at 117 it's 115. you must be using a apple computer which usally inflates apple stock prices lol..
    Apple Inc. (AAPL) -NasdaqGS
    115.31
     
  14. Astroboy907 macrumors 65816

    Astroboy907

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    Spaceball One
    #14
    :rolleyes:
     
  15. elistan macrumors 6502a

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    Jun 30, 2007
    Location:
    Denver/Boulder, CO
    #15
    Nah, Google Finance. I posted at 1:25pm EST yesterday. AAPL was at 117.50 at that time. You do realize you posted 12 hours after I did, right?

    I'm curious, and my apologies to the rest for going OT more, what your interest in bitcoins is? Did you pruchase any? If so, when and for how much?
     
  16. mobilehaathi macrumors G3

    mobilehaathi

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    Aug 19, 2008
    Location:
    The Anthropocene
    #16
    I wouldn't bother with that poster.
     
  17. UAV macrumors regular

    Joined:
    Jan 11, 2015
    #17
    i purchased my very first bitcoins in 2012 i bought 500.00usd worth which back then netted me 66 bitcoins. i held them until nov 2013 and cashed them out so that i could buy my first home. when i cashed out that 500usd i had a total profit of about 70k not bad for 1year and 500usd. i just wish my apple stock would do the same. but i think it ever will. but i am still hopeful.:D
     

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