Markets Have Faith in a Tim Cook-Led Apple

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Traders who expect stocks to go down, also known as bears, seem to be moving out of positions in Apple. Bloomberg notes that prices of puts, or bearish bets on Apple shares, have dropped to a one-year low in the wake of Steve Jobs' resignation.

Instead of increasing equity swings, Apple shares are almost unchanged since Aug. 24 when Jobs, who turned the company into the world’s biggest by market value, said he resigned. Implied volatility for three-month options at the current stock price fell to 1.07 times the level of historic volatility, down from this year’s peak of 1.9 in February. Options usually rise when moves in the underlying security increase.

[...]

The stock’s implied volatility has dropped 14 percent to 35.72 yesterday from this year’s peak of 41.71 on Aug. 8, data compiled by Bloomberg show. Sixty-day historical volatility has risen to 33.36, the highest since July 30, 2010, the data show.

"The uncertainty hanging over the stock is removed," Jack Ablin, who helps oversee $60 billion as chief investment officer for Chicago-based Harris Private Bank, said in a telephone interview.

Cheaper puts mean the broader market feels good about Apple's prospects going forward under new CEO Tim Cook, and expect the company's record growth to continue.

Image courtesy Flickr/BlackburnPhoto

Top Rated Comments

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119 months ago
About the bear pic: I knew Macrumors had a sense of humor somewhere :D
Score: 9 Votes (Like | Disagree)
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119 months ago

so wud up with the bear :D


It is a reference with a sentence in the text:


Traders who expect stocks to go down...also known as bears...


:D
Score: 4 Votes (Like | Disagree)
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119 months ago

That's great, although what does the bear has to do with it? :D

so wud up with the bear :D

Very first line:

Traders who expect stocks to go down, also known as bears

Score: 4 Votes (Like | Disagree)
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119 months ago
I wish they would let that bear lead Apple. He's got a lot of potential.
Score: 3 Votes (Like | Disagree)
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119 months ago

I wish they would let that bear lead Apple. He's got a lot of potential.


Indeed, imagine the innovation:

The iClaw, The iFish and of course the iMaul! :cool:
Score: 2 Votes (Like | Disagree)
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119 months ago
i bought puts immediately after the announcement, because i figured for sure there would be increased selling on this news, even if just temporary. it was temporary indeed -- lasted about an hour. after that point, AAPL was all up, and i ended up losing a few hundred before finally giving up and selling my puts about a week later :/

i've long been a fan of apple, but i'm surprised the market hasn't had a stronger reaction to this. consumer electronics landscape can shift quickly, and even if they continue to put out strong products for a long time, it will be difficult to maintain (let alone grow) the kind of dominance they have right now with ipad and iphone.

we'll see if apple can revolutionize TV soon...
Score: 2 Votes (Like | Disagree)

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