Apple Inc. (AAPL) Option Traders Gamble On a Quick Bounce

Apple Inc.'s (AAPL) weekly 1/9 107-strike call is being bought to open today

by Karee Venema

Published on Jan 6, 2015 at 12:13 PM
Updated on Apr 20, 2015 at 5:32 PM

Although a recent survey at Piper Jaffray suggested tablet adoption at corporations may be slowing, the poll revealed roughly 98% of participating enterprises were supported by Apple Inc.'s (NASDAQ:AAPL) iOS. As such, the brokerage firm -- which also had upbeat words for software giant Oracle Corporation (NYSE:ORCL) -- reiterated its "overweight" rating and $135 price target. While the stock is failing to capitalize on this bullish note due to broad-market headwinds, option traders are keeping the faith, and are scooping up calls at a rate 1.2 times the intraday average.

In fact, a number of speculators are wagering on the equity to bounce back by week's end, and are initiating new long positions at the weekly 1/9 107-strike call -- AAPL's most active option. By purchasing the calls to open, traders expect the security to settle north of $107 at this Friday's close -- when the weekly series expires. Delta on the call is docked at 0.36, suggesting a 36% chance the option will finish in the money.

Widening the sentiment scope reveals today's accelerated call activity is just more of the same. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the stock's 50-day call/put volume ratio of 2.37 ranks in the 72nd percentile of its annual range.

This bullish positioning isn't too surprising, given the security's long-term technical prowess. Specifically, over the past 52 weeks, AAPL has tacked on roughly 37%. As touched upon, Apple Inc. (NASDAQ:AAPL) has shed 0.5% this afternoon to trade at $105.74. Today's call buyers could be hoping the stock bounces from its 20-week moving average -- currently located at $107.01. Not only has this trendline ushered AAPL higher since last April, but it also contained the security's mid-October pullback.

Weekly Chart of AAPL Since April 2014 With 20-Week Moving Average

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