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How to Play Apple Ahead of the iPhone 5 Release

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With most of the iPhone 5 specs leaked, the disappointment it's likely to cause could be factored into the stock price.

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MINYANVILLE ORIGINAL Apple (AAPL) traded at a new all-time high yesterday of $683.29. The tech giant has returned 64.94% so far this year and 76.97% over the past 12 months. Tomorrow Apple is holding an event to announce the long-awaited release of the iPhone 5. There are also rumors surrounding the release of a new line of iPod Touches, a new 2012 iMac, and the iPad Mini. However the only confirmed release for tomorrow is the iPhone 5.

Apple enthusiasts and iPhone users the world over have been waiting for this event for a long time, but will their expectations be met? Most of the news surrounding the iPhone 5 has already leaked, so the phone is likely to disappoint. The new phone is rumored to be slightly thinner than the iPhone 4S; it will have a bigger screen and 4G LTE connectivity. Unless Apple has a major surprise planned there isn't much else expected from the iPhone 5. Samsung (SSNLF) is also expected to file suit over patent issues with the 4G LTE technology that will be included in the iPhone 5. It is also increasingly unlikely that Apple will unveil the iPad Mini tomorrow.

Apple has sold off around $20 from the new all-time highs it recently made. With most of the iPhone 5 specs leaked, the disappointment it is likely to cause could be factored into the stock price.

My Trade: Selling the September weekly 685-690 Call Spread and 645-640 Put Spread for $1.80 total
Risk: $320 per 1 lot
Reward: $180 per 1 lot
Notes: I make money if Apple stays between $643.20 and $687.80. I make money if Apple stays within a $40 range between now and Friday. This is a neutral strategy where I would be selling the movement.

No positions in stocks mentioned.
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