A little more on Deutsche/Apple: The firm notes Japanese analyst Yasuo Nakane has long been cautious about FQ2 (March quarter) iPhone builds, and thinks the consensus for FQ2 iPhone sales has fallen to around 37M. The U.S. team thinks Nakane's estimates (45M builds in FQ1, 28M-30M in FQ2) implies upside to his FQ1 sales forecast, and downside to his FQ2 forecast. Meanwhile, his forecast for 17M-19M FQ2 iPad builds implies upside to an FQ2 forecast for sales of 15M. [View news story]
Each of those people bought 1,000,000 iPhones
Unless things get really crazy 500-550 should be the range until earnings.
More on Apple: Shares could be pressured by a downgrade to Neutral from Citi. The firm says checks indicate Apple has cut its March quarter iPhone 5 orders following a 45%-50% increase in monthly output from October to December. UBS recently said checks suggested the iPhone 5's build rate would fall sharply in the March quarter, while Jefferies claimed iPhone component suppliers saw big order cuts last week. Citi, which started Apple at Buy on Nov. 26, also thinks Samsung is doing very well. Update: Morgan Stanley responds by pointing to encouraging U.S. iPhone/iPad survey data. But a gap has opened up between U.S. and foreign iPhone share trends. [View news story]
According to the underlying report, the Citi PT was $575 not $525.
I agree that Google's Jan put prices are rich. But that's because earnings come out on Jan 19, the day before options expiration. Based on Google's history ,a gap up or gap down 5-10% on Jan 20 would not be surprising. And the 2011 Google charts show that the moving averages do not provide support against strong downside moves in this stock. Therefore to sell puts with confidence, you must believe that Google's earnings/guidance and the Street's reaction thereto will at the very least be decent. Or you must be prepared and able to buy the stock if its put to you and hold it even if the stock falls in the short term. What's your view on Google's Q4 earnings and why?
You are correct prices for Jan 2012 puts are high and therefore make put selling tempting. But the reason is that earnings come out on Jan 19-a day before options expiration. Google's stock price has often gapped up or gapped down by 5-10% the day after earnings depending on the results and guidance and the Street's reaction to them. Further the moving averages do not seem to provide support when the move is to the downside. Unless you intend to buy the shares if they are put to you come hell or gigh water, you need to be pretty confident about Google's results on Jan 19, to be comfortable about the trade.
A little more on Deutsche/Apple: The firm notes Japanese analyst Yasuo Nakane has long been cautious about FQ2 (March quarter) iPhone builds, and thinks the consensus for FQ2 iPhone sales has fallen to around 37M. The U.S. team thinks Nakane's estimates (45M builds in FQ1, 28M-30M in FQ2) implies upside to his FQ1 sales forecast, and downside to his FQ2 forecast. Meanwhile, his forecast for 17M-19M FQ2 iPad builds implies upside to an FQ2 forecast for sales of 15M. [View news story]
Unless things get really crazy 500-550 should be the range until earnings.
More on Apple: Shares could be pressured by a downgrade to Neutral from Citi. The firm says checks indicate Apple has cut its March quarter iPhone 5 orders following a 45%-50% increase in monthly output from October to December. UBS recently said checks suggested the iPhone 5's build rate would fall sharply in the March quarter, while Jefferies claimed iPhone component suppliers saw big order cuts last week. Citi, which started Apple at Buy on Nov. 26, also thinks Samsung is doing very well. Update: Morgan Stanley responds by pointing to encouraging U.S. iPhone/iPad survey data. But a gap has opened up between U.S. and foreign iPhone share trends. [View news story]
Google's Retracement Is Your Gain [View article]
I agree that Google's Jan put prices are rich. But that's because earnings come out on Jan 19, the day before options expiration. Based on Google's history ,a gap up or gap down 5-10% on Jan 20 would not be surprising. And the 2011 Google charts show that the moving averages do not provide support against strong downside moves in this stock. Therefore to sell puts with confidence, you must believe that Google's earnings/guidance and the Street's reaction thereto will at the very least be decent. Or you must be prepared and able to buy the stock if its put to you and hold it even if the stock falls in the short term. What's your view on Google's Q4 earnings and why?
Arothman
Google's Retracement Is Your Gain [View article]