Investors bullish ahead of Apple iPhone launch

Investors bullish ahead of Apple iPhone launch

SAN FRANCISCO/CHICAGO - Investors are hoping that Apple Inc will unleash some of its old magic when it takes the wraps off its latest iPhone on Tuesday, with many building bullish share and options positions.

In the past two weeks, Apple investors have bought almost twice the number of call options than puts on three major US option exchanges.

Apple on Tuesday is holding a media event at its headquarters in Cupertino, California, where it is expected to launch an updated iPhone model - widely referred to as the iPhone 5S - as well as a cheaper version of the device dubbed the iPhone 5C.

Investors are hoping that in addition to the phone unveiling, the company will also announce it has finally penetrated the world's largest wireless carrier China Mobile Ltd , which has over 740 million users.

Currently, Apple phones are supported by Chinese telecom carriers China Unicom Hong Kong Ltd and China Telecom Corp Ltd, which has a combined subscriber base of 266 million.

"Apple is effectively only selling to half the Chinese market today," said Brian Colello, analyst with Morningstar."They can essentially double their sales in China quickly with China Mobile. So it's a big deal."

But Colello also cautioned that many investors could have already bought the stock in the hope of a deal with China Mobile and could sell off if the deal does not materialize in the near term.

Also, Apple shares typically sell off on major product unveiling and Tuesday's iPhone launch could mark the same trend.

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