Apple, once the media darling and the best stock that you could possibly own, has been extremely volatile and absolutely unpredictable, as anyone who has been watching stock prices lately can attest to. A large part of Apple’s current rollercoaster ride is because of the fact that no one really knows what is going on behind the scenes with the company. There are also conflicting stories coming out of China. Some stories have said that China has banned Apple from selling apps in the country, while others say that this isn’t true. Obviously only one of these stories is the truth, and that has created a lot of conflicting action on the stock.
These are not the only false stories to come out about Apple. And Apple isn’t the only company that has seen this happen to it. Recently, Tesla has also run into the same problems. Other high profile companies find that this happens to them, too. As a short term trader, this is extremely frustrating as it can skew short term movement, and make it almost impossible to correctly predict where a stock is going. If all of your data points toward an upward move, then it is easy to take out a call option on the asset, until false information sways other traders. If you have a very short expiration time, this can be impossible to reverse, and it will make otherwise winning trades become losers. Luckily, this doesn’t happen often. When it does, you need to be paying attention though, and get ready to improvise your trading strategy to compensate for this anomaly. There’s no surefire way to avoid this problem, but by paying close attention to the news, you can avoid the bulk of the problems that it will create for your account size and profitability.
As a binary options trader, watching the news is important. Even news stories that aren’t true, or are based on speculation, have the ability to move markets. When there is a highly visible company like Apple, everyone wants a piece of the action, and it can be easy to create a story that isn’t 100 percent true because it will create views for a website. Watching these stories is important because they influence short term prices in one way or another, but you also need to keep an eye on the big picture. For example, prices rose when it was announced that Berkshire Hathaway had purchased shares of Apple, the stock rose dramatically in price. But now, we know that they paid about $100 per share, which means that the company is currently holding Apple at a large loss. Even the strength of the legendary investor Warren Buffett isn’t enough to push Apple up over this price right now.
Also, consider the fact that a story was released last week that Apple might delay iPhone 7 release because of poor presales. This story hurt the stock’s price, even though a story came out shortly after that indicated that this previous story wasn’t true. Again, when you’re as ubiquitous in society as Apple is, it’s easy to publish a story for them to get media attention, but that doesn’t necessarily mean that it’s true. As a binary options trader, this kind of data can be tempting, but that’s only for the short term. If you are going to be taking out longer term positions, you need to have a much clearer picture of the stock’s fundamental data so that you can make an educated decision on where it is headed, and be able to sort out what’s true from what’s not.