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Option Brief: After last week touching its lowest point since mid-October, Apple Inc. (NASDAQ:AAPL) is on the mend. The shares were last seen 1.5% higher at $509.20, after comScore said the company extended its lead as the top domestic smartphone manufacturer last quarter, with 41.8% of the proverbial pie. What's more, option traders are gambling on even more upside for AAPL before the weekend.
The equity's weekly 2/7 505- and 510-strike calls are most popular so far today, with more than 12,500 contracts traded at each strike. The majority of the calls crossed on the ask side, and volume has surpassed open interest at the strikes, hinting at newly bought bullish bets. Meanwhile, delta on the 505-strike call has jumped to 0.68 from 0.39 yesterday, suggesting a roughly 68% chance of the calls ending in the money on Friday afternoon, when the options expire. Likewise, delta on the 510-strike calls stands at 0.45, compared to 0.25 at yesterday's close.
By purchasing the calls to open, the buyers expect Apple Inc. (NASDAQ:AAPL) to finish the week north of the respective strikes. Should the security stage a retreat and head back toward $500, the calls could expire out of the money, and the buyers will forfeit the initial premium paid for the contracts.