Apple Stock Joins Club Trillion; McDonald's Sinks on Food Poisoning Reports

McDonald's is the latest restaurant name hit with a food poisoning scare

by Patrick Martin

Published on Aug 2, 2018 at 3:13 PM

Stocks are mostly lower today, though Apple's big milestone has the Nasdaq outperforming. Meanwhile, iPhone titan Apple Inc. (NASDAQ:AAPL) is pointed higher, while wearable tech name Fitbit Inc (NYSE:FIT) and blue chip McDonald's Corporation (NYSE:MCD) are modestly lower. Below, we'll take a closer look at how shares of AAPL, FIT, and MCD are trading today.

Apple Options Traders Targeting Calls 

At last check, Apple stock was up 2.7% to trade at $206.87, earlier hitting the vaunted $1 trillion market cap, with the stock eventually topping out at a record high of $208.38. Since the start of the summer, the surging FAANG name has relied on its 60-day moving average to contain pullbacks, and yesterday it gapped higher thanks to an upbeat earnings release. 

In the options pits, calls are surging in popularity today. Over 846,000 calls have changed hands, five times the expected pace and volume pacing for the 99th percentile of its annual range. Leading the charge are the weekly 8/3 205- and 207.50-strike calls, while Trade-Alert suggests another trader may be rolling up their weekly 8/10 197.50-strike calls to the 8/10 202.50-strike call.

Tariff Scares Overshadow Fitbit Earnings

Fitbit stock is down 9.3% to trade at $5.38, despite the company reporting a second-quarter earnings loss that came in lower than analyst expected. However, the wearable tech name noted that tariffs could weigh on results going forward. In response, FIT stock has breached its year-to-date breakeven level, and has now shed 45% since its June 12 annual high of $7.79. 

Short sellers are likely cheering today's drop. Short interest increased by 30% in the two most recent reporting periods to 35.42 million shares, the most since March. This represents a hefty 18% of FIT's total available float, or 9.3 times the average daily pace of trading.

Food Poisoning Weighs On McDonald's Stock

It seems McDonald's has encountered some food poisoning concerns of its own, as reports of a listeria outbreak in France weigh on the shares -- not to mention potentially serving a cleaning solution to a pregnant woman. In response, MCD stock is down 1.6% at last check, the second worst Dow stock today. McDonald's shares have shed 10% since testing the $170 level back in June, an area that coincides with their year-to-date breakeven level.

Coming into today, options traders had preferred calls This is indicated by MCD's 50-day call/put volume ratio of 2.01 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 99th annual percentile. Not only does this indicate call buying has doubled put buying in the past 50 days, but the elevated percentile rank indicates the rate of call buying has been unusual.


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