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Apple Inc. (NASDAQ:AAPL) option players have shown a distinct preference for bullish bets over bearish of late, as the stock hovers just shy of annual-high territory. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the equity's 50-day call/put volume ratio of 2.62 ranks in the 98th percentile of its annual range. Simply stated, calls have been bought to open over puts with more rapidity just 2% of the time within the past year.
In today's session -- with AAPL last seen trading at $98.91, less than 1 point away from its July 29 52-week peak of $99.44 -- call volume is running at a 54% mark-up to what's typically seen at this point in the day. Most active are AAPL's weekly 8/22 98- and 100-strike calls, where a collective 60,241 contracts have changed hands -- mostly at the ask price, hinting at buyer-driven activity. IV is up at both strikes, and volume outstrips open interest at the lower-strike call, making it safe to assume new positions are being initiated.
The in-the-money 98-strike calls are being purchased for a volume-weighted average price (VWAP) of $1.17, making breakeven at this Friday's close -- when the options expire -- $99.17 (strike plus VWAP). Meanwhile, breakeven for the out-of-the-money 100-strike calls is $100.33 (strike plus VWAP of $0.33). Not only does this represent a new annual high for AAPL, but it sits just 0.4% south of the security's record peak of $100.72, tagged on Sept. 21, 2012. Gains for both sets of option traders are theoretically unlimited beyond the respective breakeven marks, while losses are limited to the initial premium paid, should Apple Inc. (NASDAQ:AAPL) settle south of the strikes at week's end.