Trade Idea: June At the Money Apple Call

A quick option trade idea that would best be executed this week:

Buy an at the money (meaning the strike price is very close to the current price of the underlying shares) call on Apple in anticipation of their announcing the new iPhone on June 7th at their World Developers Conference, and hopefully sharing that it will be available on Verizon (home to a nice market of 93 million subscribers). Some relevant information (Source: ):

"June 7 is now a near-certainty to be the launch date for the latest iPhone, with Apple CEO Steve Jobs kicking off the firm's Worldwide Developers' Conference on that day (and with US retailer Wal-Mart halving the prices of the current iPhone 3GS in readiness). That would suggest that the new handset would hit the shelves in early July. The pattern is a familiar one, since the original iPhone launch in June 2007...

...Amid speculation over whether Verizon would get an iPhone this time around (and even some rumors that Sprint would gain a CDMA version instead), research by Morgan Stanley found that an Apple handset would benefit Verizon, with 17 per cent of its subscribers "very likely" to purchase the device if offered. That compares with 14.6 per cent of AT&T customers who express interest in the product.
Wal-Mart is to cut the price on the entry level iPhone 3GS, with 16Gb of memory, by $100 to $97 with a two-year AT&T contract. When Apple introduced the iPhone 3GS last June, it cut the price of the older iPhone 3G to $99."

As of this post, the latest transaction price for an Apple June 10th call at strike price of $250 is $8.85 per contract (meaning a total price of $885 plus commission and fees).

Do let me know if you end up making the trade! I will track the performance closer to the option execution date.

More on the new iPhone: