Tag Archives: aapl

Fixed Income

Investors Take a Big Bite Of Apple Inc Debt Issuance-And Love It; MarketsMuse

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MarketsMuse Fixed Income update profiles Apple Inc latest bond issuance courtesy of late afternoon desk notes distributed to institutional clients of deal co-manager Mischler Financial Group, the financial industry’s oldest and arguably largest boutique Finra member firm that is owned and operated by Service-Disabled Veterans. MarketsMuse Editors are compelled to add at the outset: The term “Service-Disabled” is a terrible misnomer that the US Dept of Defense should consider changing.

The vast majority of these veterans are ‘disabled’ only within the construct of the certification that is awarded to members of the military who were injured in the line of duty and since relieved from serving in active duty roles. Without discounting the sacrifices that so many veterans have made while serving in our military, sacrifices that have permanently altered their lives and those of their families consequent to truly debilitating injuries sustained, thousands of veterans who were injured in one way or another and who have since returned to the workforce have proven time and again that they are not only fully-able, but they are 110% “mission capable” and “mission ready” whenever provided the opportunity to demonstrate their trained skills and talents within private sector roles.

Moreover, SDVs can be found in leadership roles across the Fortune landscape, including CEO, CFO and corporate treasury positions at the world’s leading companies. We make note of this because the world’s most recognized company, Apple Inc. made the same note of this when appointing Mischler Financial to serve within the ranks of today’s cast of underwriters who helped bring this $8 billion, multi-tranche bond deal to the institutional investor marketplace. Without further ado, below is a short extract from Mischler’s nightly edition of debt capital market commentary, “Quigley’s Corner”

Ron Quigley, Mischler Financial
Ron Quigley, Mischler Financial

Two mega deals hit the tapes early this morning led by an $8b 7-part from Apple Inc. and a $10b 6-part from Shell International Finance.  There were a total of 8 IG Corporate issuers that tapped the dollar DCM to price 20 tranches totaling $21.525b bringing the WTD total to more than 14% more than the syndicate midpoint forecast or $45.125b vs. $39.34b.  Meanwhile, the Kingdom of Sweden also added $2.25b from the SSA space with a new 3-year bringing the all-in IG day totals to 9 issuers, 21 tranches and $23.775b.

New Record: Quickest In History to the Half Trillion Dollar Mark!

Today marks a landmark in the history of IG issuance – It is the earliest time in any year that we reached the $500 billion issuance mark.  YTD IG Corporate-only volume now stands at $510.797 billion! Investor appetite for the stability of higher rated credits and especially those from Corporate America is beyond robust. Congratulations to Apple for their help in putting us on top with this new and very impressive record!  Well-timed and well-priced no doubt!  YTD all-in IG issuance (Corporates plus SSA) is now $634.407 billion.  Not too shabby folks!

Investor’s Bite the Apple – And Like It Alot! A Look at Today’s 6-Part Demand

Apple Final Book Sizes Bid-to-Cover Rate Final Pricing Currently Trading
2yr FRN 590m 2.36x 3mL+5 issue bid
2yr FXD 2600m 3.47x +30 30/28
5yr FRN 840m 1.68x 3mL+30 $100.05/
5yr FXD 2900m 2.32x +45 44/42
7yr FXD 2900m 2.32x +75 75/73
10yr FXD 5850m 2.925x +100 99/97
30yr FXD 5300m 2.65x +140 141/139

A redacted version of Quigley’s Corner, including a synopsis of the day’s investment grade corporate bond market activity is available via Mischler Financial Group’s website.

Global Macro Strategy, People Profiles

Global Macro Trading: Why It’s Time to Stop Hating Apple Inc

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MarketsMuse.com Global Macro update necessarily touches on the hyperbole and couch quarterbacking connected to yesterday’s earnings announcement from Apple Inc ($AAPL), which included a big bump in planned corporate share buyback and increased dividend.

Our editors were particularly entertained by below extract from today’s edition of global macro trading commentary produced by Neil Azous, the Founder and Managing Member of Rareview Macro LLC and publisher of “Sight Beyond Sight”. During the past year, and notwithstanding a focus on thematic, macro-style strategies, Azous has published a selection of comments re $AAPL which have proven remarkably prescient. Below snippet is merely a teaser to a more detailed defense of Apple, and the same edition includes a Rareview look at “Gold Terrorists.”

(LATE POST:CNBC staffers were apparently so tickled by the Apple comments from Azous (and specific recommendation below), they demanded that Azous share his tongue-in-cheek comments on air…the video clip is below)

Neil Azous, Rareview Macro
Neil Azous, Rareview Macro

“…On a personal note, we would encourage those professionals who love to hate AAPL to book themselves a series of therapy appointments. It is ok to spend $10,000 and tell a stranger that you are “angry”.

We recommend one session each for the following 10 “issues” for you to work through. In fact, see if you can haggle yourself a discount for a pre-paid 10-pack of therapy sessions.

1. You are “angry” about the fact that their China revenues went to $17 bln from $10 bln and sales in China surpassed the US.

2.You are “angry” about the 70% year over-year growth rate in a country that is supposed to be in a hard landing.

3.You are “angry” about the China stock market impact, i.e. the $4 trillion in new market cap that could be put towards a new iPhone or Watch, and that AAPL is now geared to China.

To read the entire a.m. edition of “Sight Beyond Sight”, including commentary focused on “Gold Terrorists” and the outlook for yellow metal within the context of a sensible investment portfolio, please click here. (Subscription is required; Free Trial is available)….

Strike Price

AAPL in Advance of Earnings: A Truly Smart Options Strategy

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MarketsMuse.com Strike Price update takes a swipe at the plethora of sell-side analysts already dueling on air in advance of Apple Inc.’s April 27 quarterly earnings release (folks who will be proffering their respective EPS outlook post mortems and assortment of “consensus” talking points and take-aways after Tim Cook steps away from the conference call microphone). Instead, our MarketsMuse Option mart experts decided to share a uniquely thoughtful trade strategy for those fluent in options and agnostic as to the short-term stock price impact of mundane metrics that include a fresh look at Apple Watch orders and backlog of orders, or whether revenue reported conformed to the general consensus of Wall Street researchers.

The thoughtful idea is only for truly macro-friendly traders and professional investors, not for those who maintain “a longer-than-before-lunch-but before-the closing bell” approach to investment management. The AAPL  options idea in question (based on and intended to express a positive view on the company’s share price over medium-to-longer-term) is rare, as it is exclusively focused on a thesis that is driven by intellectual, macro-style rational reasoning, which requires one to embrace a disciplined approach to the overall investment process.

In the case of the noise already surrounding AAPL earnings, the idea is courtesy of widely-cited-by-mainstream media (and frequent MM contributor) Neil Azous, the principal of global macro think tank Rareview Macro and publisher of the investment newsletter Sight Beyond Sight. It starts with distilling the jibber jabber that is typical to CNBC guest bloviators and pontificaters and discounts the emotions of momentary price ticks  based on whether the Apple Watch will soon be followed by an Apple Car. Instead, the Alpha capture Apple of an idea is based on expert fundamental analysis, a global perspective that is very similar in style to the 2 prior Apple Inc-related ‘calls’ that Azous advanced in Feb and March of this year  (re: Apple Swiss Franc bond issuance and March (AAPL / GOOG options trade).

Without further ‘background’, the trade idea makes for great reading by option market intellects, especially when considering that the expert in question is considered to be a Hedge Fund Industry Rising Star (nominee for Institutional Investor’s 2015 award), via a $300mil model porfolio, he is outperforming the leading global macro strategy investing peers, and within the context of this post, an expert who is batting 1000% and is 2:2 (as in home runs) when it comes to taking a bite out of and best leveraging the action in Apple Inc.

The fresh-off-the-press (April 21) AAPL options-centric trade idea is easily-accessed via the archives section of the Rareview Macro website (subscription required, Free Trials are available to newbies). For Twitterites, Rareview Macro updates can be followed via @RareviewMacro.

Global Macro Strategy, Strike Price

A Safer Options Bet For Arbing $AAPL and $GOOG : Think “Dividend Strategy”

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MarketsMuse update profiling a very intriguing options strategy for professional traders is courtesy of a.m. edition of “Sight Beyond Sight” , the global macro strategy-centric publication from Rareview Macro LLC. The MM editors include former option market-makers and we’re reasonably confident that the following idea has not yet been considered by those who pride themselves on innovative, yet low risk option strategies. Caveat: for professionals only.

Neil Azous, Rareview Macro
Neil Azous, Rareview Macro

New Idiosyncratic Situation in Apple & Google…Avoiding the Mainstream Noise

There is no overnight recap today. Instead, we are going to present an equity idea on Apple Inc. (symbol: AAPL) and Google Inc. (symbol: GOOG).

If a discretionary money manager looks at their portfolio construction through the lens of “return streams” one such bucket would be called “idiosyncratic”. It is debatable what type of investment qualifies as “idiosyncratic” but we would argue “option conversion arbitrage” falls into this category nicely.

Option conversion arbitrage does not typically find its way into books about options trading. That is not surprising, given that the term alone would prompt most eyes to glaze over. With a little extra effort, however, this stock and options combination strategy should not be too difficult to fully understand.

Furthermore, demystifying conversion arbitrage does not require an advanced degree in finance or being a veteran market maker. All it will require is a basic understanding of put and call options (both buying and selling), familiarity with stock buying/shorting and knowledge of the stock dividend process. Conversions incorporate these elements, and a few others, in their cost and profitability structures and in the dimension of risk assessment, so you should brush up on them before getting started. Continue reading →

Fixed Income, Global Macro Strategy

$AAPL Swiss Bond Deal-Slicing Through the Jibber Jabber With a Rareview

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MarketsMuse update profiling Apple, Inc. ($AAPL) Swiss bond issuance is courtesy of extract from a.m. edition of Rareview Macro LLC’s “Sight Beyond Sight.”

The commentary on Apple Inc. (symbol: AAPL) and Swiss franc (CHF) below is certainly a rare view, simply because most professionals are still trying to decipher the impact of this morning’s Swiss bond deal.

Neil Azous, Rareview Macro
Neil Azous, Rareview Macro

Given the focus on the world’s largest company and Switzerland in the aftermath of the shift in central bank policy in January, one would think there would be a lot more discussion about the debt offering described below. It is not happening. That is not because professionals or the media are not interested in the deal. It is, instead, largely because this offering is intellectually challenging to first analyze and second, to report on.

Apple Inc.: To Sell CHF750M Bonds in 2-Tranche Offering; Scheduled To Price Today.
o Tranche 1: CHF500m 11/2024 at MS +27bps area
o Tranche 2: CHF250m 15Y at MS +37bps area
o Lead managers: CS, GS
So let’s analyze this together through our lens. Continue reading →

ETF News, Global Macro Strategy

US Equities: Lower Is More Likely Than Higher: A RareView Global Macro View Point

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Below is excerpt from opening lines of today’s edition of “Sight Beyond Sight”, the macro-strategy commentary courtesy of Stamford, CT-based think tank Rareview Macro LLC. Our thanks to firm principal Neil Azous for the following observations.

Neil Azous, Rareview Macro LLC
Neil Azous, Rareview Macro LLC

Model Portfolio Update:   Significantly Reduced Equity Net Long Exposure

Our inspiration level today is almost as low as the price of gold – that is, close to touching a low for the year.

We are struggling to find a meaningful macro catalyst or new top-down theme. None of the specific ideas we have analyzed recently are an “A Trade” and we will not deploy them ourselves, or ask you to either. The risk-reward in the short-term in many consensus themes are up 1 and down 2, not the profile of up 3 and down 1 that in the past we have always looked for.

In fact, we are finding that the psychology that has driven us all year is dissipating and for the first time we are more concerned about giving back performance in the model portfolio than generating further profits.

In the absence of a new opportunity, and following a period of healthy outperformance, a dilemma has arisen for us – markets/positions by nature mean revert. Now everyone has their own metric they watch for,  and their own threshold for the mean reversion in their portfolio to start with. But let us just say that ours has been breached and it has served us well in the past to pay attention to that.

Now that may not be the case for many of you, and if we were in your position there is little question we would be pursuing the same ideas/themes in order to catch up with our benchmark. For today, we have little to offer you. However, like the Homebuilder seasonality and beta observation made yesterday (reminder BZH reported this morning and is in small cap basket we presented), we will continue to highlight ideas as and when they arise.

So in that spirit, we significantly reduced our net long equity exposure. Continue reading →

ETF News, Global Macro Strategy

Macro Musing: Brother, Can You Spare A Dollar? $DXY A Rareview Sight Beyond Sight

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Below courtesy of extract from a.m. edition of Rareview Macro’s “Sight Beyond Sight”…   MarketsMuse Editor note: notwithstanding the ‘caveat’ immediately below re: focus on FX, for those who are chewing on Apple ($APPL), MarketsMuse editorial team recommends a full read of below

Neil Azous, Rareview Macro LLC
Neil Azous, Rareview Macro LLC

An astute friend and mentor once said: “Deciphering the tea leaves of macro is an art developed over time, not purchased in an online tutorial”. In our humble opinion, today’s edition of Sight Beyond Sight is a good example of reading the tea leaves.

The majority of today’s note is related to Foreign Exchange but has implications across all assets going forward. If you are not a dedicated FX investor and not interested in making or saving money read no further.

On a risk-adjusted return basis the overall trading ranges across regions and asset classes are narrower than normal. This is prime example of indecision or neutrality after a strong relief rally in risk assets, especially in Equities.

The one outlier is the US Dollar, which continues its march higher towards regaining its status as an “asset” currency once again. The US Dollar is stronger relative to 9 of the 10 currencies in the G10.

The Dollar-Yen (USD/JPY) and New Zealand Dollar (NZD/USD) both broke key technical levels overnight – the Yen as a result of Japan’s trade deficit widening by more than expected, on an unexpected rebound in imports, and the Kiwi because of another disappointing milk auction that will weaken the country’s Terms of Trade, as well as negative Producer Price Index (PPI) data, and a growth downgrade by its Treasury yesterday.  Continue reading →

ETF News, Global Macro Strategy

The Anger Indicator: A Rareview

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Below extract courtesy of this a.m.’s edition of Rareview Macro’s Sight Beyond Sight..(Re-published with permission from Neil Azous)

Neil Azous, Rareview Macro LLC
Neil Azous, Rareview Macro LLC

Here is an aggregation of the various statistics either sent to us from subscribers or we came across during our readings this weekend.

1.  Japan Government Pension Fund (GPIG):  Apple (AAPL), Exxon and Microsoft have the heaviest weighting in the MSCI Kokusai Index; ~87% of GPIF’s foreign stock holdings follow this benchmark. (Source:  Eurofaultlines)

2.  As far as we can tell the degree of these inflows have not yet been widely observed by other paid forecasters on the Street. EM Portfolio Inflows Reach New High In May: Our EM portfolio flows tracker indicates that portfolio inflows to emerging economies continued their upward trend of the last several months, reaching the highest level since September 2012, when the Fed launched QE3 (Chart 1). In May, EMs are estimated to have received $45 billion in portfolio inflows from global investors, up from $28 billion in April and $27 billion in March. The May figure reflects $28 billion going into EM bond markets (portfolio debt flows,Chart 2) and $17 billion into EM stock markets (portfolio equity flows, Chart 3). (Source: Institute of International Finance) Report

3.  This week the S&P 500 will surpass the 1995-96 record for number of consecutive days in which the index has traded above its 200-day moving average.

4.  SPY closed above its upper Bollinger 5 days in a row through Friday. SPY has only closed above its upper Bollinger 4 days in a row 4 times since 2009. (Source: Fat Pitch)

5.  Relative Strength Indicators (RSI)

a.  The S&P 500 (SPY) 9-day RSI is over 70 = Overbought

b.  The NASDAQ (NDX) 9-day RSI is 74 and AAPL’s is 80 = Overbought

c.  The Transports (IYT) 9-day RSI is over 77 = Overbought

d.  The Semiconductors SOX) 9-day RSI is over 70 = Overbought

6.  Since 1950, the DJIA has lost -1.9% and SPX -2.1% in June. The last 20 years have been even weaker. Moreover, the SPX has been down in 11 of the last 16 mid-term elections Junes (Source: Stock Traders Almanac).

7.  The VIX has closed below 12 for five straight days, the longest streak at that level since 2007 (Source:  Volatility Trader) Continue reading →

ETF News

“How Do You Like Them #Apple(s)?

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Courtesy of post-distribution desk notes from WallachBeth Capital’s ETF Execution Expert, Chris Hempstead..

8am Monday June 11

Maybe Apple can solve the world’s problems. We find out today!

As global markets react positively to the news of yet another ‘solution’ to the European debt crisis, a soft poll of peers reveals they are not as cautiously optimistic as the tape might indicate.

The latest announcement of a $125bb rescue package for Spanish banks seems like yet another attempt to hold back an incoming tide with a pile of sand. For those of you who don’t spend time at the beach, it does not work; the water always finds a way around it and eventually consumes it.

With that in mind and more importantly should you be looking for creative ideas to take a contrarian view against what could be a short term rally, and it seems as I write this the markets have thrown in the towel already, there was a nice little article in the WSJ this morning about a little known ETF, HDGE– The Active Bear.

Additionally there was a write up on Seeking Alpha highlighting the highs and lows of HDGE since its inception in January 2011 as well as worthy comparisons versus –SDS-Proshares Ultra Short S&P 500 over both the short and long term.

HDGE is an interesting and unique actively managed ETF as there are no others like it. The fund managers Brad Lamendsdorf and John Delvecchio run the portfolio of short equities. While some other ETFs exist with partial short positions, the HDGE is all short all the time and it is NOT a leveraged fund. Continue reading →

ETF News

#Apple Makes The Move to All-ETF Retirement Plans: Benzinga.com

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Whoaaa!…EDITOR NOTE RE: story below–re-distributed June 6 by this platform ONLY AFTER numerous ‘highly-accredited’ news outlets did the same earlier that day, has since been overtly challenged for its accuracy/veracity by IndexUniverse  . 

In hindsight, IU’s challenging multiple media outlets that regurgitated this story for a failure on the part of mainstream journalism in general is harsh, but not unwarranted when considering the overall decline of reporting. This is double-edged sword of an all-web world that enables and demands a 24/7 news cycle, which is powered by emotion and a lust for breaking stories–as opposed to well-researched reporting.

Without anyone having the benefit of actually being able to speak with any AAPL HR/Benefits execs to confirm or deny the elements of the story first written by  SourceMedia Inc.’s  Employee Benefit News, we respectfully caveat that EBN ‘s senior editor (who is the by-line author) either failed to do any fact-checking, or perhaps the story she attempted to write is that Apple Inc.’s HR/Benefits team plans on introducing yet another investment opportunity, within a presumably long list of funds that large company employees can invest their 401k money into.  To our valued audience, we–as well as Benzinga’s reporter are contrite for any role we might have inadvertently played in reporting what might end up being an inaccurate or erroneous report from SourceMedia’s Employee Benefit News.

All of that aside, the concept of offering an ETF-specific investment program within a list of options for employees of large and or small companies makes perfect sense. Charles Schwab has certainly acknowledged that it is working on such an investment program, albeit it is apparently still in development.

 

By Benzinga.com

Apple AAPL +1.53% , the largest U.S. company by market value, is once again setting a standard for innovation, but this time the innovation isn’t coming by way of the iPhone, iPad or Apple TV. Rather the company is making the move to an ETF-only retirement plan for its employees.

While the exchange-traded products has grown by leaps and bounds in recent to almost 1,470 total products with over $1.13 trillion in assets under management at the end of May, ETFs still are not prominently used in in company-sponsored retirement plans such as 401(k) plans. That market is still largely dominated by mutual funds.

At the end of 2010, ETF assets in 401(k) plans were scant at just $5 billion, or 0.2% of total assets, compared to $1.8 trillion, or 58% of 401(k) assets, according to Cerulli Associates. However, some firms are pushing the ETF/401(k) issue. For example, ExpertPlan announced that it will add more than 900 ETFs, including those offered by Barclays, Claymore, First Trust, iShares, Rydex and Wisdomtree, according to ETF Trends.

Charles Schwab SCHW +2.27% , the eleventh-largest U.S. ETF sponsor, has been working on an ETF-only 401(k) plan that would use index-based ETFs. Capital One’s COF +0.68% ING Direct offers index ETFs in its Sharebuilder 401(k) plan, and T.D. Ameritrade AMTD +2.41% also includes ETF options in its 401(k) plan, ETF Trends noted earlier this year.

But the move by Apple, not only the largest, but the most innovative U.S. company in the eyes of many, to all-ETF retirement plans stands as the strongest endorsement to date of the utility of ETFs when it comes to retirement planning. Continue reading →

Strike Price

What’s Next?..Options Trading On Facebook (FB)

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Options on Facebook (NASDAQ: FB) will be available as early as May 29th. With volatile price action in FB after its IPO, traders will look to options strategies to profit

In the next several months FB is going to face pressure to grow into its current 100 Billion dollar valuation. As a growth stock trading over 100 times earnings, any sign of slower growth in Facebook will cause the stock to plummet quickly.Traders who do not think Facebook can hold its current valuation have a number of options strategies to profit from any fast downside price action.

Depending on implied volatilities of FB options, traders can be either short or long volatility. It is unlikely that FB stock will increase or decrease in value by more than 30% in one year. If options are trading will implied volatilities greater than 30%, traders should be net sellers of options. Selling vertical call spreads, which involves selling call options at strike prices above the current price and buying a call option at strike prices even farther out from the current price. This strategy will be profitable if FB maintains its price or decreases.

Notes WallachBeth Capital’s Randy Sharringhausen, an institutional options market expert, “Even if the company’s fundamentals don’t come close to justifying its IPO price, this is a company that has 450 million customers that visit every day and a corporate treasury flush with enough currency to finance any number of  major acquisition to better monetize its customers.  This should prove to be an interesting name to trade by the hedge fund and risk arb community, as well as the long/short managers.”

Continue reading →

People Profiles

#Facebook Over-Booked? Or Over-Cooked?

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Breaking News: Bloomberg LP reports Facebook will be raising its IPO price range by 15% (from $28-$34 to $34-$38) and AAPL co-founder Steve Wozniak said he will buy shares in Facebook at the get go, regardless of price.

AAPL co-founder Steve Wozniak

In the same story, Bloomberg LP also reported  a “Bloomberg Global Poll” of more than 1,250 investors, analysts and traders  found 79% of those polled believedFacebook doesn’t deserve such a high valuation (that  poll was based on the lower pricing set just one week ago).

Comments?

 

ETF News

AAPL Un-Buckling-Case Study ETF Correlation

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According to TradersMag, during Q1 2012,  ETF volume as a percentage of total volume reported by major exchange fell to 16 percent from 19 percent (for all of 2011) because correlations between individual stocks and ETFs has declined. Once again, it appears to be a stock-picker’s market.

The same column in TM referenced a Credit Suisse reoprt that found that average correlation across the S&P 500 went as low as 13 percent in February. (It has since bounced back to around 40 percent.) In 2011, by contrast, correlation surpassed 80 percent in the fall and ended the year at 77 percent for December.

According to Credit Suisse analyst Ana Avramovic, ““If correlation is high, then macro fears tend to dominate, and ETFs are a great way to implement macro ideas since they give you exposure to an entire sector or theme with a single product. Naturally, as correlations come down, it makes sense that ETF activity would also come down.”

Industry sources suggest that while volumes in plain vanilla ETFs–those comprised of single-name stocks- may be declining, there has been an increased use of leveraged ETFs, and ETFs tied to commodities.  One trader says, “We have so many more sector products that are out there, and so many different ETFs that are coming out that drill down to minutiae so you can get very specialized exposure. “People are going to use that instead of going in to buy a single stock.”

Now,  let’s turn the page back a few weeks to the post that identified the ETFs with largest AAPL weightings. Now let’s look at the overall market averages vs. those ETFs and vs. AAPL.  No surprises, right?

ETF News, People Profiles

Glass Half Full of Apple (AAPL) Juice : ETF Observation

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We took the liberty of scraping an interesting note from this a.m.’s  Notes from the WallachBeth ETF Desk :

“…On to Apple: Today will sure set a new tone and a new era for Apple lovers and haters; the iPad 3 (aka iPad) has been released, praised and torn down. The company is announcing a dividend and share buyback program. This is what we know.  I am a big fan of Apple products and culture, and while that typically keeps me from being bearish on the stock , here is what you may not know, or, may not be paying attention to:  the overwhelming success of AAPL could lead to a short term bearish event in the stock: a special rebalance.

AAPL is currently >18.5% of the weight in NDX. If that weight goes over 24%, a special NDX rebalance could be triggered. Additionally, if the sum weight of all members with a weight over 4.5% is greater than 48% [currently ~42.5%], a special rebalance could be triggered. So, while each event in itself has a certain probability, we could be only one member away from reaching the threshold.

If you had to set alerts on your monitor, I would set them for those three and watch their weights. ..”

Chris Hempstead, Head of ETF Trading, WallachBeth Capital

 

 

 

ETF News, People Profiles, Strike Price

ETFs with Largest Exposure to AAPL: Should You Hedge?

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Now that we’ve all forgotten the name of that former derivatives trader from Goldman who enjoyed his 15 minutes of “de-fame”, we can now all re-focus on the brand that’s causing people to line up once again for their latest product offering: Apple Inc.

According to ETF Research Center, 91 ETFs have AAPL in their baskets. The heavy-weighters with more than 10% of assets holding this “iMonster” include IYW (19%), FTQ (17.7%), XLK (17%), QQQ (17%), VGT (16.5%), IXN (15%), JKE (14.8%), ROI (11.5%), ONEQ (10.9%) and IGM (10.2%).

If you don’t own Apple shares, you know someone who does, and if you or someone in your household doesn’t own an Apple device, you might be living in China, where a mere 40 million iPads were sold in 2011, which represented a sliver (11%) of the 350 million PCs, desktops and laptops sold there last year.

Because a household member owns both AAPL stock (purchased at $380 only 4 months ago) and several Apple devices–this blogger doesn’t want to be biased insofar as any buy/sell recommendations (but, if you’re a holder, I’d absolutely recommend layering your positions with a smart option strategy courtesy of a smart option trader.) Instead, we invite you to read a very good, and very objective piece that appeared in the WSJ today, and written by old-friend and former hedge fund trader Andy Kessler.

You’ll want to click “more” for the full article. For those with short attention spans, Kessler concluded with: “One thing I’ve learned from my bruising time on Wall Street is to never get in the way of a freight train. Stocks with momentum keep momentum as mutual funds and index funds load up. They never seem expensive—until at some point the fundamentals subtly shift for the worse. Momentum works in both directions. Pull up the charts for General Motors, Xerox or Kodak on your iPhone.” Continue reading →