$AAPL · Schwab Network · 2026-11-02

Attention is once again turning to the technology sector, as Apple prepares to announce its quarterly results after the close of trading today. Analysts are forecasting earnings of $1.98 per share on an adjusted basis, and revenue is expected to approach $113 billion.

Prior to the results announcement, Apple's stock significantly outperformed a wide range of US stock indices and the " Big Seven" group, with a year-on-year increase of over 25% .

Renowned technology analyst Dan Ives says the results carry "extra weight " as it is John Ternos's first earnings call as CEO.

Ives notes that the quarter includes nine days of iPhone 18 sales and a recovery in China, which has been a crucial factor throughout the year.

The quarter will not include double-digit sales yet, and Apple has beaten earnings estimates for 14 consecutive quarters. So, will this series continue? Now is the time for a clash of opinions about "Apple".

Before we move on to your trading examples, we want to know what each of you thinks about the iPhone maker. Is this rating too high compared to the figures that will be revealed?

China will be extremely important. You're right, they won't announce double-digit sales, but guess what? They will provide guidance on double sales. The fourth quarter guidance will be crucial here.

They are looking at around $56.5 billion in iPhone sales, and around $32 billion in the services sector. The flexibility of gross profit margins must be maintained .

Therefore, the ceiling is high because the 36 times earnings multiple for 2027 is very expensive. The ceiling is extremely high here. I think that's why we saw some weakness before the numbers were released, but they need to deliver figures that attract investors, otherwise the stock could fall further.

I don't know . I don't know. We'll see how the reaction will be , but the stock has come a long way before this report. I think the ceiling is too high, Diana and Tom.

Tom, what do you think of Apple? Yes, I think it will all revolve around iPhone revenues, and that's what happened last quarter. Remember, they achieved about 21.7% year-over-year growth in iPhone sales during that supercycle that happened to the iPhone 17.

Now, they are only expecting 15% growth , so maybe there is a slowdown, but if they surprise us with positive growth, does that mean that, as Kevin said, we are facing historically high valuations for Apple, and that it has grown to reach this level?

Services are expected to continue growing upwards. This is the highest-margin part of their work.

Service revenues are expected to reach $31.6 billion. This will be closely monitored. Then you can look at iPad sales, and all wearable devices. How does it perform, especially with the newer versions of some of these devices?

Then, as you know, you are listening to Tornos. Will he bring anything else up ? There was speculation that they were developing a home robot with a 9-inch screen and a rotating arm for release in 2027-2028, according to the information.

So, we may not get any clarification regarding future products at this stage. But , Duo sales, if they give any indication that "we need to increase production because there is already a waiting period of up to 3 months for delivery." We'll have to wait and see.

If they provide slightly higher forecasts, how will their profit margins perform? Remember, in the last two quarters they talked about the continued rise in prices of the memory used in these phones.

I think the impact of that on profit margins will also be closely watched in the coming period, folks.

Yes, Diana, it's not surprising based on what you said that my test trade is leaning towards the downside. But the stock is moving, and the expected movement for this earnings event has increased in the last day or so of trading, and has not decreased.

Therefore, I think public anticipation is increasing.

Now, I looked at the execution price of 330. Considering the current stock situation, it may be slightly within the expected range of movement . It wasn't like that before, but it is now .

So, you might want to adjust your execution prices, but I chose November 13th , bought the put option at 330, and sold the option on November 4th.

It's not Friday, I sold a put option for Wednesday at 330. I paid around 135, and it's trading now around 140 to 145.

So, you know, the stock keeps moving away from the strike price of 140 and towards the strike price of 130. So, this option is gaining a bit of a premium here, Tom. But remember, you are looking for two things.

You are looking for movement, and you are looking for implicit volatility. It might drop a little with the earnings event, but wait. You get a chance because you are selling an expiry date of November 4, which is two days away.

Remember, I had the usual weekly expiry on November 13th, and then I sold on November 4th, which is a Wednesday. You can extend the deadline to the following Friday if you do not get the movement you are looking for.

But Tom, we're really targeting something we don't do much in this program, we're targeting a midweek expiration, why? Okay, that's about 15 points. It's a volatility of 73. Friday's volatility is 58, and November 13th is around 40.

So, taking advantage of the large difference between the various implied volatility levels, Tom, do a calendar of sell options down.

Good. Yes, let's analyze this deal. Oh yes, you're buying something that has about 11 days left to expire, the November 13 weekly options. You're buying a 330 put option, and you're selling the same 330 put option in the November 4 weekly options that expire in just two days on Wednesday, but they have that higher implied volatility as a package.

Therefore, it is essentially a calendar of put options with a one-and-a-half-week spread downward , incurring a discount cost of approximately $1.35.

It may be ten cents higher than that, but the discount you pay will be the risk. So , $135 for each difference, and you can see that here in the risk profile. You want the stock to reach the execution price of 330 or close to it .

This is where you will achieve the greatest profitability in positions, but you probably have a range of 315 to 318 on the downside , and perhaps 340 to 345 on the upside to be a potential profit in this trade.

Because there are multiple weekly options at Apple and some other big tech names, you will have multiple opportunities to roll over or modify that short option , creating balances that increase potential profitability and reduce your risk in doing so .

But, this gives you exposure on the downside in exchange for an inexpensive discount, doesn't it? This is your risk in this matter. The discount you pay is $135 for that downside exposure, and it is limited to a range.

The stock doesn't have to hit 330 directly. It could be outside that range, you know, by more than $5 in either direction, and you could still make a potential profit on that trade.

As Kevin mentioned, take advantage of the volatility levels between what you buy and what you sell in that transaction.

Kevin, you've been a little more aggressive , but it's a strategy where you can offset some of the cost by taking a directional bias. An idealist characterized by optimism. If you believe the stock will rise, this gives you some upside exposure.

The unbalanced "butterfly buying" strategy for the uptrend here has turned to the weekly November 6 options. We will purchase the call option at an execution price of 340, which is practically outside the current price range.

It was at the stock price earlier. In fact, it was just within the price range. We will buy one call option at 340, sell two options at 352.5, and then buy one option at 357.5 as a single package in this unbalanced strategy , with a net cost of around 420.

Well, it is trading at 370. Why is this? Because the arrow moved away. It's gone down, hasn't it? But the amount of money you owe will be the risk. So, if it's trading at 370, you can pay $370 as a risk.

If you pay 420, there will be a risk of $420 in that transaction.

The breakeven point is a little higher, you know. If you take that breakeven point , you add what you paid to the execution price of 340. So, about $344. Anything above that would be a profit.

Kevin, what are your thoughts on this unbalanced "butterfly buying" strategy ?

Yes, a buy position in a vertical option worth $12, and a sell position in a vertical option worth $5, with a spend of about 420. And as you know, the further the put option calendar is from you, the better this trade is, right? If you are optimistic about Apple stock.

Therefore, this deal is likely to trade for less than $4, and this gives you a better chance if you are right. Remember that this is a bet that depends more on the trend. So, if you are wrong about the direction, you probably won't perform well, but your risk is limited by the amount of debt paid.

Make sure the price is unstable between execution prices, as this is a trade to bet on an upward trend. Like I said, a buy vertical position at $12, a sell vertical position at $5, and we spend about $4, Tom.

Yes, and the options market prices a one-day move to tomorrow's opening by plus or minus $13, which means that the breakeven point of slightly more than 344 would be within one standard deviation.