Insuring Against Apple Blow-up Just Got A Lot More Expensive

?by Sofia Horta E Costa

(Bloomberg) — Apple Inc. has reached $700 billion in market value. As investors buy up the stock, some are also hedging their bets.

Options trading shows the cost of protection more than tripled since a low on Nov. 17, according to data compiled by Bloomberg. The shares are not safe from market drawdowns and a stronger dollar may hurt earnings, said Virginie Robert of Constance Associes. After climbing to a record in 2012, Apple fell 44 percent in seven months.

?The Apple rally will stop at some point,? said Robert, co-founder of the Paris asset-management firm that holds Apple shares. ?Not all quarters will be as good as the last one.?

Apple reported a record $18 billion in quarterly profit on Jan. 27, propelling the shares higher and spurring shareholder Carl Icahn to say it?s one of the best buys in decades. Still, the company made 65 percent of it sales from outside the U.S. in the last quarter, and that could be a problem with the dollar at its strongest in more than 10 years.

A technical analysis signal shows momentum in Apple shares is increasing, with the relative strength index higher than 70. The last time it reached that level in November, the stock fell 10 percent in less than three weeks.

Apple rose 1.7 percent to $126.95 at 9:39 a.m. in New York after a 2.3 percent gain on Wednesday as Icahn raised his anticipated price for the company?s shares.

Kristin Huguet, a spokeswoman for Apple, didn?t immediately respond to an e-mail seeking comment on the options trading and technical analysis.

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