Call Players Take Aim at Apple Inc. (AAPL) Amid New High

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

by Karee Venema

Published on Feb 23, 2015 at 10:30 AM
Updated on Apr 20, 2015 at 5:32 PM

Apple Inc. (NASDAQ:AAPL) hit a new all-time peak of $130.85 earlier -- and was last seen trading just below this notable milestone at $130.77 -- following news the tech titan is planning to spend nearly $2 billion to build a pair of data centers overseas. Options traders are responding in kind, scooping up calls at a rate 1.5 times the average intraday pace.

Most active are AAPL's weekly 2/27 130- and 131-strike calls, where buy-to-open activity has been detected. By initiating these long calls, traders expect AAPL to settle the week -- when the series expires -- north of the strike prices. Delta on the lower-strike call is docked at 0.59, and 0.47 at the higher-strike call, suggesting a 59% and 47% chance, respectively, of an in-the-money finish.

From a wider sentiment perspective, short-term speculators have shown a distinct preference for calls over puts. AAPL's Schaeffer's put/call open interest ratio (SOIR) of 0.62 not only indicates call open interest outweighs put open interest among options slated to expire in three months or less, but it ranks lower than 86% of similar readings taken in the past year. Simply stated, speculative traders have rarely been more call-skewed.

Outside of the options pits, analysts continue to be enamored with Apple Inc. (NASDAQ:AAPL). Of the 30 brokerage firms covering the stock, 24 maintain a "buy" or better rating, with not a single "sell" to be found. Plus, the average 12-month price target of $134.12 stands in territory yet to be charted.


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