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Option bulls have been active lately on Apple Inc. (NASDAQ:AAPL), according to data from the major options exchanges. The International Securities Exchange (ISE) and Chicago Board Options Exchange (CBOE) report that speculators have bought to open 200,401 calls on AAPL during the past five sessions, compared to only 88,431 puts. In other words, speculative options players have picked up 2.27 times more calls than puts on Apple Inc. within the past week.
From a broader view, AAPL has racked up a 10-day call/put volume ratio of 2.34, based on cumulative buy-to-open volume data from the ISE, CBOE, and NASDAQ OMX PHLX (PHLX). This ratio outranks 94% of other such readings taken during the past 52 weeks, as options traders have rarely shown a greater preference for bullish bets over bearish.
Calls Gaining Popularity -- And Not Just With Bullish Speculators
This strong skew toward calls over puts has been a fairly recent development in the Apple Inc. (NASDAQ:AAPL) options pits. Looking back, the equity's 10-day ISE/CBOE/PHLX call/put volume ratio hit a near-term low of 1.48 just a few weeks ago, on Nov. 20.
In the front-month series, call players have lately been favoring the December 590 strike. This option has gained roughly 9,000 contracts in open interest during the past 10 sessions, and is now home to 11,147 contracts. However, it's interesting to note that nearly 54% of the December 590 calls added within the past 10 days were sold to open, according to the ISE, CBOE, and PHLX.
Traders could be writing uncovered calls here as a form of straightforward speculation, with the premium sellers expecting the security will remain at or below $590 through front-month expiration -- which is just over a week and a half away. Alternately, Apple Inc. shareholders may be selling covered calls to collect some premium on their stock holdings. Meanwhile, the players who bought new December 590 calls appear to be banking on a breakout to new highs during the short term.
Key Technical Levels Loom Overhead
Either way, the $590 area is worth watching during the near term. The $585.38 level represents a 10% year-to-date gain for AAPL, while $594.59 coincides with the equity's December 2012 peak. As a result, this area could be a potential speed bump for the shares. Plus, the newly tagged 52-week high of $575.14 could exert some double-top pressure -- and with AAPL's Relative Strength Index (RSI) at 69, the shares appear to be correcting a short-term overbought situation.
From its current levels, however, Apple Inc. (AAPL) would need to make up some ground to challenge those potential hurdles. The stock is docked at $565.28 this afternoon, so the 590 strike is a 4.4% rally away.