As Apple (AAPL) makes progress towards releasing iPhone 5, details are leaking out.

For a long time, there has been speculation that Apple will use Liquidmetal on a large scale in iPhone 5.

Liquidmetal is not a liquid but a commercial name for a series of amorphous metal alloys. These alloys were developed at California Institute of Technology (CALTECH). These alloys are marketed by Liquidmetal Technologies (LQDT).

Liquidmetal alloys are made of a mix of titanium, nickel, copper and zirconium, among other metals. These materials feel as smooth as liquid or glass when touched; hence the name Liquidmetal.

These materials offer high tensile strength, excellent resistance to corrosion, and strong resistance to scratches. These materials can be easily cast and molded using heat similar to thermoplastics.

Apple is known for unique, elegant, industrial design that differentiates it from its competitors. There is no doubt that if Apple can pull off makiing an iPhone case out of Liquidmetal, it will be unique and elegant.

In the past, I repeatedly dismissed speculation of use of Liquidmetal in iPhone 4, iPhone 4S, and iPads for a host of technical reasons. My calls to date have proven spot on.

This time may turn out to be different although I am still skeptical.

Apple CEO Cook said, “We’re going to double down on secrecy on products.” Coincidentally at the same time online photos of what appear to be parts of iPhone 5 were published by 9To5Mac. In the picture published 9To5Mac, the back of the phone appears to be Liquidmetal.

There is intense investor interest in the stock of Liquidmetal. I receive more emails regarding this stock than any other stock.

Every time there is speculation about Apple using Liquidmetal, this stock jumps. It is a low priced stock and moves in percentage terms can be rather large.

The insanity is that some investors continue to contend that Liquidmetal stock will jump astronomically in value when there is confirmation that the iPhone 5 case is made of Liquidmetal. The reason such speculation is insane is because use of Liquidmetal in iPhone 5 case will have no material immediate financial impact on Liquidmetal. Please carefully read 8K filed with SEC. quote

Item 1.01. Entry into a Material Definitive Agreement.

On August 5, 2010, Liquidmetal Technologies, Inc., a Delaware corporation (“Liquidmetal”), entered into a Master Transaction Agreement with Apple Inc., a California corporation (“Apple”), pursuant to which (i) Liquidmetal contributed substantially all of its intellectual property assets to a newly organized special-purpose, wholly-owned subsidiary (the “IP Company”), (ii) the IP Company granted to Apple a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in the field of consumer electronic products in exchange for a license fee, and (iii) the IP Company granted back to Liquidmetal a perpetual, worldwide, fully-paid, exclusive license to commercialize such intellectual property in all other fields of use.

If Liquidmetal turns up in iPhone 5 case, there is not much doubt that uninformed speculators will run Liquidmetal stock up. For investors who can read an 8K, there is a bonanza ahead first on the long side and then on the short side.