Subject: Fw: GBP + AAPL [C]
From: Vahe Stepanian ‹ >
Date: Thu, 05 Dec 2013 13:00:35 -0500
To: Paul Morris
Cc:
Classification: Confidential
Paul - would like to send JE the below as a follow up to Tuesday. If he wants
to write calls vs. AAPl, think now is an opportune time.
Let me know what you think
Thanks,
Vahe
Good Afternoon Jeffrey - following up Tuesday's email (included below):
1) WSJ has reported that AAPL has signed a deal w/China mobile, providing it
a boost in the world's largest mobile market. Shares have reacted, reaching a
new 52 wk. high @ —$572 (vs. $565.00 close yesterday) on the back of the
report. Consider selling Jan 595 or 600 Calls (currently $12.20 and $10.70
bid, respectively).
2) We believe the GBP trade is still relevant ahead of payrolls tomorrow. ADP
came in ahead of street expectations yesterday (215k vs. 170k expected;
revised October +54k), and street is calling for headline number of +185k
tomorrow morning. GBP is currently —1.6350 (vs. USD), but is bouncing around
today and we'd look to enter trade on additional GBP strength.
Thank you,
Vahe
(212) 454-1539
Forwarded by Vahe Stepanian/db/dbcom on 12/05/2013 08:50 AM
From: Vahe Stepanian/db/-
dbcom
To:
jeevacation@gmail.com,
EFTA01479352
Cc: , Paul Morris/db/-
dbcom@DBAMERICAS
Date: 12/03/2013 10:20
AM
Subject: GBP + AAPL
[C]
Classification: Confidential
Good Morning Jeffrey,
Hope you had a great holiday weekend. As you have likely seen, GBP is
currently at a 2 yr. high vs. USD (@ —1.64; see graph below). The most recent
move up has been attributed to a rise in construction activity for a seventh
month, the fastest pace since August 2007. I recall you mentioned in our
meeting that your view is to sell GBP if it approaches 1.65.
For what it's worth, our DB analysts have a bearish view on the pound. A
recent (DB) FX note discusses reasons why it's tough to build a fundamentally
bullish case for sterling with the market pricing the first BoE hikes by
mid-2015 (well ahead of the ECB and even the Fed). We see potential for GBP
to
reverse to the mid-1.50s by year-end.
With that said, we priced up a few options that I've included below -
consider
selling a call, buying a put or a risk reversal. Recognize that GBP vol. is
currently relatively low (vs. historical levels).
Spot ref = 1.6397
1) Sell European GBP Call on GBP/USD
Strike: 1.67
Notional: GBP 5,988,023.95 (or -$10mm)
Expiry: Tue 03-Jun-2014 (6m)
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Settlement: Thu 05-Jun-2014
Premium: USD -103,400
2) Sell European GBP Call on GBP/USD
Strike: 1.70
Notional: GBP 5,882,352.94 (or —$10mm)
Expiry: Wed 03-Dec-2014 (12m)
Settlement: Fri 05-Dec-2014
Premium: USD -123,900
3) Buy European GBP Put on GBP/USD
Strike: 1.6376 (ATMF)
Notional: GBP 5,988,023.95 (or -$10mm)
Expiry: Tue 03-Jun-2014 (6m)
Settlement: Thu 05-Jun-2014
Premium: USD 219,365.27
Also worth mentioning — AAPL has run up quite a bit in the past few days
(currently trading @ —$560; up from $519.80 on 11/22). I know you're looking
to sell calls, will provide levels if still interested. Recall you're long 2k
AAPL @ —$529.06.
Have a great day.
Thank you,
Vahe
(Embedded image moved to file: pic05051.gif)
Vahe Stepanian
Associate I Wealth Investment Coverage
Deutsche Bank Securities Inc.
agement
mai
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