Apple (AAPL) is getting blasted this week as the company deals with iCloud Celebrity Photo-gate and slipping confidence within the analyst community.

What’s worse is that this PR nightmare is taking place on the eve of what is widely expected to be Apple’s first new product launch since 2010.

AAPL has been very quick to assess the potential vulnerabilities to its iCloud online storage service, issuing a press statement that the leak of nude celebrity photos was not due to a vulnerability within the iCloud service. But while the company insists that there are no security risks to worry about when using iCloud, Apple still is warning developers that “Apps using the HealthKit framework that store users’ health information in iCloud will be rejected.”

While this makes sense from a healthcare perspective, it is not exactly a confidence booster for AAPL stock holders seeking reassurance.

The second blow to Apple stock this week came as analysts expressed concern regarding Apple’s growth potential in new products and services. Analyst Andy Hargreaves of Pacific Crest Securities summed it up by noting that he does “…not expect either new segment to drive incremental profits that are meaningful at Apple’s scale in the near to medium term.”

That said, all of this bad news and revenue speculation could be swept away if Apple’s big Sept. 9 event goes well.

According to wide speculation, Apple is expected to not only take the wraps off two new variants of its wildly popular iPhone line, it is also expected to unveil the highly anticipated iWatch, a pay-by-touch payment system, and the HealthKit and HomeKit developer packages.

Expect details on the payment system to catch analysts’ attentions, while the iWatch should drive investor enthusiasm during the event.

Turning to AAPL stock, shares remain ridiculously in favor with the brokerage community, despite this week’s turmoil. In fact, data from Thomson/First Call reveals that 43 of the 53 analysts following AAPL rate the stock a “buy” or better, followed by nine “holds” and one “sell” rating.

Despite this wealth of enthusiasm, there is room for improvement.

Specifically, the 12-month price target for AAPL stock rests at $107, a mere 9% premium to yesterday’s close. Price target increases following next week’s event could help drive AAPL stock higher.

In the options pits, calls are the investment vehicle of choice among short-term AAPL stock traders. In the September series, there are 979,937 call contracts open vs. 613,522 put contracts. The result is a front-month put/call open interest ratio of 0.62, with calls nearly doubling puts in the series.

Zooming in for a look at the weekly Sept. 12 options, we find that calls are even more popular, with the weekly put/call open interest ratio falling to a reading of 0.51. The most popular strike is the out-of-the-money Sep $107 strike, which sports open interest of 63,492 contracts. By contrast, peak put open interest totals just 29,720 contracts at the weekly Sep $95 strike.

Click to Enlarge Overall, weekly Sept. 12 implieds are pricing in a potential post-event move of about 5%. This places the upper bound at $102.87, while the lower bound lies at $93.13.

An upside move would help AAPL stock recoup this week’s losses, returning the shares to all-time-high territory. A downside move, however, would send AAPL below support at its 50-day moving average and force the shares outside of an upward trend channel they have occupied since May.

Given this week’s turmoil and a major event looming early next week, AAPL’s implied volatility appears to be a bit on the low side. In other words, AAPL option implieds might be underestimating the potential post-event move.

Straddle AAPL Stock

With the outcome of next week’s event uncertain, a good way to take advantage of this situation would be to enter a Sep $97.50 straddle.

At the close of trading on Thursday, the AAPL Sep $97.50 straddle was offered at $5.56, or $556 per pair of contracts. Breakeven for this trade lies at $103.06 on the upside and at $91.94 on the downside.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.