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Apple Inc. (AAPL) Traders Set Their Sights On a New Annual High

Apple Inc.'s weekly 7/11 95-strike call is being bought to open today

by 7/7/2014 10:46 AM
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In the wake of a new hire announcement and an early morning price-target hike, Apple Inc. (NASDAQ:AAPL) rallied to a fresh annual peak of $95.42. The move higher has not gone unnoticed by option traders, who are scooping up calls at a rate more than two times the intraday average. Short-term contracts are in high demand, per the equity's 30-day at-the-money implied volatility (IV), which is up 1.9% at 26.8%.

Specifically, the most active AAPL option is the weekly 7/11 95-strike call, where 32,269 contracts have changed hands. The majority of these calls have traded at the ask price, IV has surged 5.1 percentage points, and volume outstrips open interest -- collectively pointing to the purchase of new positions.

With AAPL last seen near $95.38, these calls are in the money. However, in order for today's call buyers to profit, the stock must be sitting north of $95.74 (strike plus the volume-weighted average price of $0.74) at this Friday's close, when the weekly options expire. Gains are theoretically unlimited with each notch above here, while losses are limited to the initial cash outlay, should Apple Inc. (NASDAQ:AAPL) finish south of the strike at week's end.


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