Welcome to Extreme Investor Network, where we provide you with unique insights into the world of investing. Today, we want to discuss Apple – a company that has recently caught investors’ attention with its historic announcement during their first-quarter earnings release.
Apple reported topping estimates on both revenue and earnings per share, but the real highlight was the initiation of the largest corporate buyback ever, totaling $110 billion. This move has reignited interest in Apple, which has been a laggard among the Magnificent 7 this year.
One of the key strategies that Apple has employed over the years is consistent and persistent buybacks, which have helped stabilize the company short-term. In fact, Apple added nearly $190 billion in market cap after the earnings release, bringing its total value close to $3 trillion.
Our expert analysis indicates that while we believe in the long-term recovery of Apple, we are not convinced that the stock will reclaim the $200 level in the short term. This belief is supported by technical indicators, prompting us to implement a complimentary trade strategy.
We recommend selling a call spread on Apple as a way to protect a long position. By selling the 5/17/24 AAPL $190 Call and buying the 5/17/2024 AAPL $195 call, you can create a net credit spread collecting 69 cents per spread sold. This trade provides protection on a long $175 call position and offers potential profits if Apple settles above $190.
It’s important to note that our disclosures indicate we have a long position in Apple and have sold the call spread mentioned. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice. We recommend seeking advice from your own financial or investment advisor before making any decisions.
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