2 Popular Apple Put Options

Near-term Apple options traders are put-skewed at the moment

Aug 21, 2018 at 10:16 AM
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Apple Inc. (NASDAQ:AAPL) has continued to push higher since topping a $1 trillion market cap, hitting an all-time high of $219.18 on Monday. AAPL's strong rise has taken its 14-day Relative Strength Index (RSI) into overbought territory, checking in at 74 at last night's close. Overall, the stock is up almost 28% in 2018, last seen 0.5% higher at $216.60, following a bull note out of BofA-Merrill Lynch.

Just this morning, the brokerage firm boosted its AAPL price target to $250 from $230, saying the company will benefit from growth in non-gaming apps, which makes the App Store more sustainable over time. This price target represents more than 15% upside for the iPhone maker, and comes in well above the average 12-month price target of $216.99. In fact, the stock still has mostly "hold" ratings from analysts.

Looking in the options pits, Apple has a Schaeffer's put/call open interest ratio (SOIR) of 1.28, which ranks just 4 percentage points from a 12-month high. In other words, near-term options traders are much more put-skewed than normal. At a glance, though, there's heavy open interest at a number of far out-of-the-money puts, hinting at potential hedging from shareholders.

More recently, the September 200 and October 210 puts saw sharp rises in open interest during the past 10 days. The former option has seen a near-even split of buying and selling activity. The October puts, meanwhile, have almost exclusively been sold to open, suggesting traders are betting on a floor for the shares.

All the while, the Dow component has remained in the headlines. Yesterday the iPhone maker confirmed it removed thousands of gambling apps from its App Store in China. Meanwhile, the company is reportedly planning to release a new low-cost MacBook.


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