Apple Cancels Their EV Project
Apple has decided to stop working on its electric car, which they started about ten years ago. Their stock went up 0.7% after this announcement. Some employees who were working on the electric car will now work on artificial intelligence instead. Makes sense as this is more inline with their total product offering.
Because interest rates have gone up to control inflation, people aren’t as excited about buying electric cars, which tend to be more expensive. This has caused some companies to cut jobs and make fewer electric cars.
Big car companies, like Tesla, are also changing their plans. Instead of focusing on electric cars, some are looking into making hybrid cars, which use both electricity and fuel.
Apple began Project Titan, their electric car project, ten years ago, when everyone was getting interested in self-driving cars. They were thinking of releasing their car in 2024 or 2025, but things didn’t go as planned. Even before the COVID-19 pandemic, they were having some problems. In 2019, they had to let go of 190 workers from the project and change how they were making the software.
At first, they wanted to make a futuristic car without a steering wheel, but later, they changed their minds and decided to make a car with advanced driving assistance features that looked more like other cars on the road.
Option Strategy of the Week:
What is a Call Debit Spread?
A call debit spread, also known as a bull call spread, is a multi-leg options strategy that involves buying a call option while simultaneously selling another call option with a higher strike price. Both options have the same expiration date. The key aspect of this strategy is that the call option purchased (lower strike) costs more than the call option sold (higher strike), resulting in a net debit to the trader’s account.
How Does it Work?
The beauty of call debit spreads lies in their ability to profit from a bullish outlook while minimizing risk and capital outlay. When you establish a call debit spread, you’re essentially betting that the underlying asset’s price will rise but with a capped maximum profit potential and limited risk.
For instance, if you believe that stock XYZ, currently trading at $50, will rise in the near term, you could set up a call debit spread by buying a $50 strike call option (the lower strike) for $3 and simultaneously selling a $55 strike call option (the higher strike) for $1. The net cost of this trade would be $2 ($3 – $1).
Advantages of Call Debit Spreads
Limited Risk: Unlike simply buying a call option, where your potential loss is the entire premium paid, call debit spreads have a capped risk. Your maximum loss is limited to the initial debit paid to enter the trade.
Lower Cost: Call debit spreads allow traders to participate in bullish movements of an underlying asset at a fraction of the cost of buying a single call option outright. This makes them accessible to traders with smaller trading accounts.
Defined Profit Potential: Similarly, your maximum profit is capped at the difference between the two strike prices minus the net debit paid. While this limits potential gains, it provides clarity on the profit potential of the trade.
Example Trade
Here is an example trade that we would use at CFU to take advantage of the recent upside bullish potential for AAPL:
BTO AAPL 041924 180 CALL
STO AAPL 041924 190 CALL
Limit 4.74 Debit
Here is what the profit and loss profile looks like for this trade:
This would put $474 at risk while we look to gain $526 if Apple can be priced above 190 on April 19. This would produce a return of 110.9%
Here are some of the results we booked of our members using this and other similar strategies:
CFU RESULTS FROM LAST WEEK
Members Booking Profit:
CLOSED AND REALIZED PROFITS 💰
Our community is fiercely focused on booking monthly profits. We are currently not accepting new enrollments but be sure to keep an eye on joincfu.com for alerts when we open the doors for more members to join us.
Stephen
President, CFU
