Monday, July 18, 2011

J.P. Morgan Buy Apple calls options

Trade Idea July 19 2011 ; J.P. Morgan Buy Apple calls options : J.P.Morgan Securities' equity derivatives strategists on Monday recommended purchasing Apple Inc's August $365 call options to position for potential upside ahead of the company's quarterly earnings.

Investors who agree with J.P.Morgan's equity analyst view that the stock should lift higher over the coming days should consider buying those August calls, they wrote in a report.

Apple, the world's largest technology company by market value, is slated to release fiscal third-quarter results after the stock market close on Tuesday.

This trade can be entered for a net cost of $13.15 based on Friday's stock closing price of $364.92. The break-even of the call trade is $378.15. Buyers of equity calls, which convey the right to buy the company's shares at a fixed price up to a certain date, risk losing the premium paid if shares are below the strike price of the call option at expiration.
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