Roger Carlsen, a retired investor in Frankfurt, Illinois, has happily watched his holdings of Apple Inc rise to more than $600 a share, having held the stock for 12 years.
But with the company's earnings report due Tuesday, he's not sure the stock has much further to go. So he's been in the options market, selling call options to take some profits because he expects the shares in the world's most valuable company to have peaked, at least for now.
"I don't why, but it seems like Apple has lost some of its luster," said the 68-year-old Carlsen.
He's not alone. The stock has slipped from its $644 all-time high hit in April, trading on Monday afternoon at $603.00, hit by a broader-market sell-off and concerns that worldwide economic weakness will hurt consumer demand.
Through good times and bad in the equity markets, plenty of investors have held onto Apple. They have watched shares of the iPad and iPhone maker deliver outstanding returns year-in and year-out, even when broad markets have floundered.
But Apple faces an unusual phenomenon when reporting earnings this time around: lowered expectations. With consumers holding off on purchases ahead of the next iPhone around October and with slowed demand around the world, few expect the company -- which has topped Wall Street expectations with near regularity -- to deliver another big quarter.
As a result, uncertainty in Apple has increased, part of the reason the options have been so active.
Apple options are pricing in about a 5.5 percent move in the shares in either direction after earnings, based on weekly options expiring this Friday, said Enis Taner, global macro editor at RiskReversal.com. That is above the average 3.7 percent one-day move over the past eight quarters.