How Apple Inc. (AAPL) Is Pleasing Bulls

Apple Inc. (AAPL) hit its highest perch on record earlier

by Karee Venema

Published on Feb 4, 2015 at 2:58 PM
Updated on Apr 20, 2015 at 5:32 PM

Apple Inc. (NASDAQ:AAPL) shareholders are more than likely very happy today. The stock hit a fresh record high of $120.35 earlier -- bringing its market capitalization back above $700 billion -- and was last seen up 1.2% at $120.12. Against this backdrop, calls are trading at two times the average intraday rate, and are outpacing puts by a nearly 5-to-1 margin -- although some of this accelerated volume appears to be the result of AAPL going ex-dividend tomorrow, with multiple large blocks of deep in-the-money calls being written.

Regardless, this preference for calls over puts just echoes the withstanding trend witnessed in AAPL's options pits. For starters, the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.64 ranks in the bullishly skewed 79th annual percentile.

Additionally, AAPL's Schaeffer's put/call open interest ratio (SOIR) of 0.58 rests lower than 90% of similar readings taken in the past 52 weeks. In other words, short-term speculators have rarely been as call-heavy on the equity as they are now. In the front-month series, specifically, peak call open interest can be found at the February 120 strike, where 170,135 contracts currently reside -- and according to data from the ISE, CBOE, and PHLX, the vast majority of these positions were bought to open.

Good news for those currently purchasing AAPL's February-dated options. Since AAPL took its turn on the earnings stage in late January, the stock's Schaeffer's Volatility Index (SVI) has plunged to 24% from 44%, and now sits lower than 73% of other such readings taken over the past month. Simply stated, Apple Inc.'s (NASDAQ:AAPL) front-month options are relatively inexpensive at the moment.

AAPL SVI Since Jan. 27

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