Apple Options Traders Eye a Quick Bounce

HSBC thinks Apple was "too late to the game" with some of its new services

by Karee Venema

Published on Apr 10, 2019 at 10:31 AM

Yesterday, Apple Inc. (NASDAQ:AAPL) stock closed down 0.3%, falling short of its longest daily win streak since 2010. Today, the FAANG stock is lower once again, down 0.5% to trade at $198.53, thanks to a bearish analyst note.

Specifically, HSBC downgraded the stock to "reduce" from "hold," with the brokerage firm saying it doesn't expect the new slate of Apple services -- including AppleTV+ -- to "move the needle significantly," saying the tech titan is "too late to the game." Following the equity's recent surge, though, HSBC raised its price target to $180 from $160, still a discount to current levels.

Most analysts remain bullish toward Apple, with 15 of 27 in coverage maintaining a "buy" or better rating at last night's close. However, the average 12-month price target sits at $192.12 -- below AAPL's current price.

Elsewhere, Apple options traders continue to target calls. Already today, 90,000 calls and 63,000 puts have changed hands -- 1.3 times what's typically seen at this point in the session. The weekly 4/12 197.50-strike call is most active, and it looks like new positions are being purchased here for a volume-weighted average price of $2.74. If this is the case, breakeven for the call buyers at the close this Friday, April 12, is $200.24 (strike plus premium paid).

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