Top 4 Financial Assets To Watch For The Week

 

Apple is a Strong Buy this Week

The upcoming week is an important one for binary options traders of all asset categories. Of course, the biggest story of the week in the equity sector is Apple's earnings results. Apple (AAPL) has been a laggard in the tech sector, behind giants, Microsoft (MSFT), Google (GOOG) and Amazon (AMZN). However on Tuesday, 27 October 2015, Apple is expected to release its most recent earnings report. Analysts from top investment companies across the spectrum are anticipating the earnings per share to rise from the same period a year ago to $1.88. Revenues are expected to come in at $51.1 billion. Based on the positive sentiment around Apple, I would strongly advise traders to place call options on the stock ahead of the announcement. As a binary options trader you can only benefit from this important quarterly update from the world's number one technology company.

 

Apple Revenue Future Projections & Past Performance

Just to recap, this is what is likely from Apple's latest financial earnings report:
•    Earnings per share (EPS) of $1.88
•    Revenues in the region of $51.1 billion
•    A minimum 5% stock price appreciation by the end of the week (the fact that we are looking at 5% is irrelevant for binary options traders, but it gives us plenty of leeway to anticipate the direction of price movement)

 

NASDAQ Composite 1-Month Performance

 

 

On the indices front, you have many options available this week. However, the Apple story is a big one – so big in fact that it is going to influence the Nasdaq (QQQ) tremendously. Apple is ranked as the #1 company in the world, second only to Google. The company's market capitalisation is an astonishingly large $679 billion, with a price-earnings ratio of 13.75, a 1-year target of $150 and a current yield of 1.8%. Apple's share price opened the day at $119.08, and after the earnings announcement is posted, we are expecting Apple's share price to appreciate by as much as 5% during the week ending Friday, 30 October. Already we have seen the three other major technology companies in Google, Amazon, and Microsoft make substantial gains. Apple is the ranking technology stock and provided the consensus estimates of analysts across the board are correct, the Nasdaq is bound to rally.

The general feeling among traders is that the Nasdaq 100 index will rally when Apple Inc. announces its earnings tomorrow. As a result, there are more than a handful of analysts expecting the Nasdaq 100 index to reach a record high. Call options on the Nasdaq 100 are a great way to go for binary options traders. The funny thing is, even without Apple the Nasdaq  100 index is going to rally, given the strong performance of the tech sector's heavyweight stocks.

Commodities: Put Options on Oil

Crude oil has come in for tap recently, what with the price of WTI crude oil plunging on the Nymex after the latest report from the EIA. For the week ending October 16, some 8 million barrels of oil were recorded in inventories – more than double the estimates of forecasters. The trend in crude oil prices is evident from the below graphic which represents a clear downward direction over the past 7 days. The safe money is on put options with respect to crude oil, whether it be Brent crude oil or WTI crude oil. There are many reasons why the trend with crude oil is bearish, not least of which is increasing inventory levels, continued oversupply by OPEC countries and the weak data emanating from China. Global demand for energy commodities like crude oil is down. We are seeing several interesting things taking place as a result of this, including the shuttering of oil wells and production facilities across the US as spiraling costs and declining revenues take operators out of the game. This will ultimately have the effect of decreasing supply and running down the inventories, while the equilibrium price gradually rises towards the $55-$65 range by mid-2016. For the week however, binary options traders will do well to go short on oil with put options.

 

 

Currency Pairs: Go Long on EM Currencies with Call Options

 

The currency markets are among the most volatile markets in the world, with wild swings taking place on a daily basis. There are several tips that I can provide you with vis-a-vis currency trading that are likely winners. They include the following:

•    The USD/EUR pair is bullish, and call options should be placed on it accordingly. The reason for this is clear: Mario Draghi is likely to introduce additional monetary stimulus measures at the next meeting of the Fed in December. Already, €1.1 trillion in monetary stimulus has been injected into the Eurozone, and more is likely. This increases the supply of euros, thereby decreasing the value of euros in the currency trading arena. Monetary stimulus always results in currency weakness.

•    The US Dollar Index is also bullish at this time, and traders are encouraged to place call options on this index accordingly. This is not technically a currency pair, but it is a measure of the USD against 6 major currencies.

•    Several other options abound in terms of currency trading call options, including emerging market currencies. Since the Fed is unlikely to announce a rate hike at its October meeting you will likely see a slight appreciation in the exchange rates of currencies like the South African Rand, Brazilian real, Russian ruble, Indian rupee, Venezuelan Bolívar and the Turkish lira against the USD
•    That the Chinese also reduced their interest rate will also see a depreciation of the CNY, but this is likely to be limited in scope

The veracity of the aforementioned trading advice is based on market fundamentals, and overall you will be safe with the options suggested for you. The anomalies in performance are attributed to a multitude of factors, well beyond the scope of conventional economic wisdom. The actions of speculators, geopolitical shocks and the impact of volatility on markets can have undesired consequences.