David McDonough's avatar
$480.3m follower assets
Bought AAPL $165 Calls
BULLISH
12/16/2022 Exp, Opening
September 14
2 Comments
1 Upvote
Tell me why this $AAPL trade isn't free money?
Or tell me how I’m dumb/crazy? (Obvs macro situation is a substantial headwind, I'm team soft-landing)
TL;DR:
  • AAPL price has followed a pretty identical seasonal pattern from Sept to Jan over the past 5yrs.
  • 5% selloff at first, then 20-40% rally
  • Buying Calls with Dec/Jan exp.

Context: I was wondering if/how apple’s Fall product announcements impacted stock price noticed a pretty regular pattern in AAPL stock every year from Sept to December over the past 5yrs.

Here's $AAPL's avg performance from Sept 1 to Jan 1 of the next year:

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My Thesis is that after the sept iPhone announcements, twitter /armchair
quarterbacks complain about how there’s nothing new or impressive, pre orders
are way down, this year’s iphone sales will be terrible, market was hoping for some
crazy new thing, blah blah blah…

…Then everyone goes and buys all their products anyways, spends a
zillion dollars on dongles/holiday presents, and the stock goes back up… because
it’s Apple

Like clockwork:
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The only year not following this pattern was 2018 when entire market corrected over the same time. I kind of think we've already done a lot of that correction, but that's clearly the biggest wildcard.

This all intuitively makes sense to me but I’m sure I’m oversimplifying/missing
something. I usually don't love trading $AAPL since I feel like I have zero insights not already priced in, but 4/5 years = enough of a pattern to make me want to place a bet, let's see how it goes. Below are the charts I threw together to research this (data from Yahoo Finance put into Excel) DID I JUST DO TA?!?!

$AAPL Price 2017-2021
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$AAPL Performance year vs year 2017-2021
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$AAPL Avg performance 2017-2021
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The trend is more clear when you remove 2018. Yes, this is literally the definition of cherry-picking data 🤷🏼‍♂️ ...It's my party I can do what I want to.

$AAPL Performance year vs year 2017-2021 EX-2018
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$AAPL Avg performance 2017-2021 EX-2018
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sam stribling's avatar
@mcd I think it’s a sound strategy. I’d pay up for more time and go out to an expiration in spring 2023 timeframe just because the macro environment is so volitile. You can always sell before expiration and time has value too!
David McDonough's avatar
@strib yeah this is kind of exactly what I was debating between and ultimately think you're right, might try to roll existing calls if there's a chance or just double down now that I have your blessing.
sam stribling's avatar
@mcd yeah roll them for more time and just in case maybe average into the contracts. Options prices have a way of swinging wildly especially in this turbulence! I am a fan of the trade though. It’s hard to bet against apple. Was talking to someone today who was taking the other side and bearish on them because they didn’t think the new phone release is a big deal. I am of the opinion that it really doesn’t matter if it is or isn’t. People don’t buy the phones anymore really, the carriers like $T, $VZ, and $TMUS do. So when you renew your contract it usually comes with an upgrade or if you switch they give you one in that scenario too, effectively baking in sales. Plus, they have the services side of the business that is a revenue driver too. Only risk I see is, again, this macro backdrop.
Joe McLaughlin's avatar
@strib this is a fascinating callout re: the carriers being the actual phone purchaser in most cases and it’s so true.
Conor's avatar
Very, very interesting! I believe 2018 had a major stock market correction which probably bled into Apple for that year, especially starting in September 2018. I would think that type of risk is still present today, but I like your odds.

Really good find!
Preston | Investor Insight's avatar
Personally, I am not very bullish on $AAPL here given the chart structure. I wish you the best in the position though :)
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MuhammadAli's avatar
if the FED sticks truly executes on QT as announced, then more pain ahead for equities, including $AAPL
David McDonough's avatar
@muhammadali yeah, this is probably the most likely outcome tbh

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