On September 9th, Apple Inc. (AAPL) is scheduled to announce a wearable device alongside the highly anticipated iPhone 6 debut. If we look to the past, we can expect Apple to release 2 versions of the phone, with the premium model rumored to have a possible price tag of $650 – $800. Bigger screen, bigger battery and sleek design means a higher price tag. Despite the price, demand for the new device will undoubtedly be high, and there seems to be supply chain issues that could affect the launch. Reuters reported two weeks ago that suppliers have been having problems producing enough screens.
As for the wearable device, chances are it will feature Apple’s HomeKit–a system designed to control connected fitness and health devices–which monitors health metrics such as number of steps taken, heart rate, blood pressure, sleep quality, etc. Whether the device is a wristwatch is unclear, but rumors have suggested that it will come in multiple sizes with several different designs available at multiple price points. There is no indication when the launch is scheduled to take place, but experts estimate late 2014 to early 2015. We believe that AAPL will chug higher and want to play a good reward to risk set-up.
The Trade: Buying the AAPL Sep 104-106-108 Call Fly for $.25 debit
Risk: $25 per 1 lot
Reward: $175 per 1 lot
Breakeven: $104.25 and $107.75
Greeks of this Trade:
Delta: Long
Gamma: Long
Theta: Short
Vega: Long