(Note: The author of this fundamental analysis is a financial writer and portfolio manager.)

Shares of Apple Inc. (AAPL) have come under pressure over the past couple of days as concerns over disappointing iPhone orders build. The options market is also turning more bearish on the stock's future prospects. Options trading suggests the stock price could move nearly 10 percent by December, but the upside potential is shrinking, and the downside potential is growing deeper.

Apple shares are continuing to come under pressure Thursday amid escalating investor concerns over weak iPhone 8 and iPhone 8 Plus demand. Apple's stock price has fallen by roughly 5 percent since it unveiled the new iPhones on September 12, wiping out $43 billion of the company's market cap. By comparison, the S&P 500 has risen by nearly 50 basis points, while the Technology Select Sector SPDR (XLK) has fallen by only 80 basis points. (See: Apple's iPhone X May Be Cannibalizing iPhone 8.)

AAPL Chart

AAPL data by YCharts

Bearish Tilt

As noted in an Investopedia article on September 14, the options market had shifted its timing for Apple stock to rise out to December from October potentially. The $160 December long straddle at the time was pricing in a 9 percent move in the price of Apple. It is now pricing in a nearly 10 percent move, but the pricing has taken a slightly more bearish tilt. (See more: Apple iPhone Launch Doesn't Impress Options Market.)

(Interactive Brokers)

Less Upside Potential

Based on the current implied volatility reading of 23 percent, a one standard deviation move in the price of Apple would create upside potential of only $170, with a downside risk of $135.90. To purchase a long straddle in this case would cost a trader about $15.50 based on the prices paid to buy the puts and calls.

That means the breakeven price on the calls would be about $175, and the puts would be about $144. This suggests that the price of Apple would need to move by more than one standard deviation to the upside by December to break even on the trade. On the downside, a one standard deviation move is needed to break even. This suggests that the upside outlook for the price of Apple continues to move lower.

The $150 long straddle shows the cost to make the trade is $14.50, and that represents an upside breakeven price on Apple of only $164.50, and downside risk to roughly $135.50. The downside breakeven on the puts is just outside of the one standard deviation range.

The options market appears to be pricing in less upside potential for Apple, and is making room for a fall from current levels than it was previously pricing. This suggests that for now, the stock is likely to see further weakness until it becomes clear how iPhone orders are building. And that may still be some time away.

Michael Kramer is the Founder of Mott Capital Management LLC, a registered investment adviser, and the manager of the company's actively managed, long-only Thematic Growth Portfolio. Kramer typically buys and holds stocks for a duration of three to five years. Click here for Kramer's bio and his portfolio's holdings. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Upon request, the advisor will provide a list of all recommendations made during the past twelve months. Past performance is not indicative of future performance.

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