Key Points

• Shorting Apple before iPhone 16 launch could pay off if sales disappoint.
• Consider options strategy with calls and puts.
• Stock’s recent rise makes it vulnerable; revisit after iOS 18 release.
• Also: The smart money is already looking at The Next Nvidia as the best investment today

Lee and Doug discuss the potential strategy of shorting Apple stock (Nasdaq: AAPL) ahead of the iPhone 16 launch due to anticipated disappointment in initial sales. They consider the possibility of bad press affecting Apple’s stock price, especially if early sales figures fall short of expectations. They suggest alternative strategies for those who don’t want to directly short the stock, such as selling out-of-the-money Apple calls and buying out-of-the-money Apple puts. The conversation concludes with a plan to revisit the situation twice: once after the iPhone 16 launch and again after the release of iOS 18 to assess market reactions and sales performance.

Transcript:

I am not a big shorter of stocks, but I will consider shorting Apple two or three days before the iPhone 16 launch.

Because the level of disappointment based on, you know, all these guys come out with sales of research firms.

Well, they only sold 17 of them.

There could be some very bad press about sales that first week.

And if so, that’s Apple stock’s going to get hammered.

Yeah.

And, you know, one way to pull that trade off is if you don’t want to go in for the big stock borrow, go in and you can do it naked or you could do it against the position to sell out of the money trade.

Apple calls and pair up the strike and buy out of the money Apple puts with those proceeds.

And because if it fails, you’ll win on both ends.

Or you could just sit back and watch all your friends who own Apple cry.

You could say, you know, I’m not going to get involved in this, but I’m happy to watch the misery of others.

And it did have, like you said, after the conference and all that, it had a stunning move from the spring into about the midsummer.

So, you know, it’s also top heavy just from how the stock is trading.

Yeah, it came back from the debt.

I mean, Apple underperformed most of big tech from the first of the year through that.

And then it sort of caught up to everybody.

So what we’ll do is I think we’re going to come back to this twice.

We’ll come back to it after the iPhone 16 comes out and there are two or three days worth of observations about sales.

And then we’ll come back after iOS 18.

For some reason, it’s 16 and 18.

I don’t understand how that works.

Well, I think 17 is the current OS right now.

It is.

They just don’t match a lot for some reason.

It doesn’t make a lot of sense either.

It’s very confusing to me.

So what we’ll do is we’ll come back a second time a few days after the downloads available and hear what the press and research firms say, you know, what happened with sales then.

So we’re going to come back to this twice in the next, you know, three or four months.

I’ll tell you one thing.

It better be something big.

It better be really, really big.

Because if it’s just like chat GPT on your phone, okay.

You know, you can access that through any phone anyway.

Yeah.

Yeah.

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