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  • Even Apple Co-Founder Steve Wozniak Thinks Their Products Are "Somewhat Behind"

    In an interview with the German Publication "Wirtschafts Woche," Apple Inc. (NASDAQ:AAPL) Co-Founder Steve Wozniak (Woz) briefly reminisced about his time starting the computer business which emerged to become the world's largest company. After answering nostalgic questions from Matthias Hohensee, Woz described how he spends his time now, including his role at Fusion-io (NYSE:FIO). Eventually, the Q&A lead to the competitiveness of AAPL. Here is what transpired:

    Hohensee-"Apple has in the past decade, risen with its iPod, iPhone, and iPad as one of the most successful companies in history. Recently, there are increasing doubts about how long the winning streak is still continuing."

    Woz-"Currently, in my opinion, we are in the smartphone business with features, somewhat behind. Others have caught up. Samsung is a great competitor. But precisely because they are currently making great products."

    Although the interview was published in German, you may find the rest here, easily translated with Google's (NASDAQ:GOOG) software, especially if using Chrome. www.wiwo.de/unternehmen/it/apple-gruender-steve-wozniak-wir-wollten-die-angst-vor-computern-nehmen-seite-all/7740680-all.html

    We all know about the great divide between Android and Apple products and we constantly hear disputes between Apple and Android lovers regarding which is the better product. Now Droid users and fans, and Samsung fans in particular have something new to rest their hats on. As Samsung and Apple battle in the courtrooms and in the mall for sales, Woz has shed some light through his eyes.

    Will Steve Wozniak's, comments about Samsung's better products move AAPL stock price tomorrow? Probably not, but if he feels Apple is failing to innovate as fast as Samsung and other competitors, this could be a sign of longer term struggles for the company who rose to success, based on innovative products.

    A Bloomberg Businessweek article from January 31, 2013, found here,www.businessweek.com/news/2013-01-31/samsung-gains-in-fourth-quarter-tablet-market-apple-keeps-lead , describes how Samsung has increased total tablet shipment by 75% and has subsequently doubled its market share. Although still trailing Apple's iPad sales, they were able to bring down the leaders share from 52 to 44%. The article also describes how other companies including Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) are continuing to crack Apple's armor as well.

    Again, Woz's remarks surely wont move the needle on the $440Billion Market Cap. Apple, but if he, one of Apple's biggest fans is questioning the competitiveness of the firm, how long until other fans start to lose their loyalty. For Apple, who is able to generate significant profit margins based off of high prices driven by demand from loyal customers may begin to lose that edge over time, along with their deteriorating competitive advantage in product features.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: AAPL, AMZN, FIO, MSFT
    Feb 08 9:13 AM | Link | Comment!
  • FedEx Q2 Earnings Plays

    FedEx (NYSE:FDX) is set to issue their earnings announcement tomorrow morning for their fiscal 2nd quarter of 2013. The past four earnings releases have either beat, or have been close to the highest analysts' estimates. FDX earnings have been tightly correlated and levered to the economic growth or lack of in the emerging markets, especially China. Recently we have seen companies report better than expected earnings indicating strength in the emerging markets. Joy Global (NYSE:JOY) released its earnings report last week. The machinery manufacturing company that sells mining equipment to emerging market nations, indicated growth in the emerging markets has slowed, but not to the level many analysts were expecting. Joy gave positive guidance, which could indicate positive growth to continue.

    Traders can place trades this afternoon, to attempt to trade around FedEx's earnings release tomorrow morning. Using options, these 5 trades below, offer ways to trade the stock for a bullish, bearish, or neutral outlook. All options used will be the Standard December Expiration Options with FDX currently trading at $92.66 and front month volatility at 41.4% while back month volatility is 24.2%.

    Assumption #1: FDX will have positive earnings and guidance and climb

    Strategy #1a: Sell a Put Spread

    Sell 90 Put Buy 87.5 Put

    Credit: $.37/contract

    Potential Max Loss: $5.00/ contract -$.34=$4.63

    Probability of Maximum Return: 76%

    Break Even: $89.63

    Note: Selling a put spread is a bullish strategy with defined risk, in which you will be able to take advantage of Theta Decay, or the decrease in option value from time decay and shrinking days to expiration. Since Apple has falling dramatically its option premium has expanded. Selling options will allow you to collect this extra premium from a volatility contraction. As long as Apple remains above your designated short put, you will keep the entire credit.

    Strategy #1b: Buy a Call Spread

    Buy 92.5 Call Sell 95 Call

    Cost: $.96/contract Debit

    Potential Maximum Value: $2.50/contract

    Probability of Maximum Return: 26%

    Potential Maximum Loss: Your cost, $.96/contract

    Break Even: $93.46

    Note: Buying a call spread is a bullish strategy with limited risk, as well as, limited maximum return. The maximum your position can be worth is the difference between the two strike prices used. The potential loss or risk is the amount you pay for the spread.

    Assumption #2: FDX will hint at a global slowdown and suffer from continued recessions in Europe and the stock will fall

    Strategy #2a: Sell a Call Spread

    Sell 95 Call Buy 97.5 Call

    Credit: $.43/contract

    Potential Max Loss: $5.00/ contract -$.43=$4.57

    Probability of Maximum Return: 76%

    Break Even: $95.43

    Strategy #2b: Buy a Put Spread

    Buy 92.5 Put Sell 90 Put

    Cost: $.87/contract Debit

    Potential Maximum Value: $2.50/contract

    Probability of Maximum Return: 25%

    Potential Maximum Loss: Your cost, $.87/contract

    Break Even: $91.63

    Assumption #3: FDX will rise or fall, but within a small measured amount

    Strategy #3a: Iron Condor

    Buy 85 Put Sell 87.5 Put Buy 97.5 Call Buy 100 Call

    Credit: .25/ Contract

    Potential Max Loss: $5.00/ contract -$.25=$4.75

    Probability of Maximum Return: 80%

    Break Even: $87.26 and $97.74

    Note: By using an Iron Condor a trader has the ability to profit as long as the stock closes at expiration within the short strikes. Traders have a low delta, and high theta in this strategy. Traders get paid using an Iron Condor as time and volatility are taken out of the option contract prices.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Tags: JOY, FDX, options
    Dec 19 10:17 AM | Link | Comment!
  • Google Nears 61.8% Fibonacci Retra

    Google Inc. (NASDAQ:GOOG) has fallen over 16% since its October 5th all-time high of $774.38 settling today at $647.26. Google's shares took a nose dive intra-day after its earnings fiasco on October 18th, when the earnings report was announced earlier than expected forcing shares to be halted after taking a dive. Since the earnings report, in which earnings did beat estimates, shares have continued lower, but with a low implied volatility. Waiting just below current price levels, is the 61.8% Fibonacci Retracement, a technically significant level in which the share price should see support and rebound to the upside. Share prices may fall another 1% to approximately $640 to test this level of support before the bounce back begins.

    (click to enlarge)Google

    The following option strategies can be used to take advantage of a Google rebound in the next few days, while using less capital than buying stock and defining your risk and potential loss.

    Strategy #1: Long Call Spread

    Buying a call spread is a bullish strategy with limited risk, as well as, limited maximum return. The maximum your position can be worth is the difference between the two strike prices used. The potential loss or risk is the amount you pay for the spread. If we were to use this strategy here being proactive before the 61.8 Fib is reached, with Google around $647 our strategy will be using the December standard options, Buy 645 and Sell the 650 call.

    645/650 Long Call Spread

    Cost: $2.50/contract Debit

    Potential Maximum Value: $5.00/contract, a 100% return

    Probability of Maximum Return: 45%

    Potential Maximum Loss: Your cost, $2.50/contract

    Break Even: $647.50

    Strategy #2: Short Put Spread

    Selling a put spread is a bullish strategy with defined risk, in which you will be able to take advantage of Theta Decay, or the decrease in option value from time decay and shrinking days to expiration. As long as Google remains above your designated short put, you will keep the entire credit. Again, with Google at $647, your strategy will be using the December standard options by Selling the 640 and Buying the 635 put.

    635/640 Short Put Spread

    Credit: $2.00/contract

    Potential Max Loss: $5.00/ contract

    Probability of Maximum Return: 65%

    Break Even: $638

    Disclosure: I am long GOOG. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

    Additional disclosure: My option portfolio carries long delta in GOOG.

    Tags: GOOG, options
    Nov 16 8:17 AM | Link | Comment!
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