Stocks quoted in this article:
Option Brief: Shares of Apple Inc. (NASDAQ:AAPL) are in the green today, on news that Carl Icahn upped his stake in the tech titan by 22%. The activist investor is also reportedly pressuring Apple CEO Tim Cook to launch a $150 billion buyback program. The move higher has sparked a flurry of call activity in AAPL's options pits, with the contracts trading at a 44% mark-up to the average intraday call volume.
The two most active calls are the weekly 10/25 530 and 535 strikes, which have seen a collective 62,592 contracts change hands thus far. A healthy portion at each strike has crossed on the ask side, and volume is outstripping open interest, pointing to the initiation of new bullish positions. Data from the International Securities Exchange (ISE) confirms some of the day's activity at both strikes is of the buy-to-open variety.
With AAPL lingering near $531.89, the lower-strike calls are currently in the money. However, in order to profit, the stock must muscle north of $532.61 by tomorrow's close, which is the strike plus the volume-weighted average price (VWAP) of $2.61. Meanwhile, breakeven for the higher-strike calls is $536.21 (strike plus the VWAP of $1.21), or territory not charted by AAPL on an intraday basis since Jan. 4.
While Apple Inc. (NASDAQ:AAPL) has experienced some longer-term difficulties on the charts, the stock has made an honest effort at technical redemption of late, and over the past three months, has tacked on almost 21%. Off the charts, the iPod purveyor is slated to unveil its fiscal fourth-quarter earnings results after next Monday's close.