Apple Inc. (AAPL) Option Bear Makes Waves

One Apple Inc. (NASDAQ:AAPL) option bear bought a massive block of weekly 5/22 114-strike puts

by Karee Venema

Published on May 6, 2015 at 2:58 PM
Updated on May 6, 2015 at 3:01 PM

Calls are once again running hot on Apple Inc. (NASDAQ:AAPL), with the contracts crossing the tape at two times the average intraday pace. By the numbers, 1.4 million calls have changed hands, compared to 457,000 puts. Drilling down, the January 2016 series is quite popular, but it's the action of one option bear, in particular, that has drawn notable attention.

Specifically, a 10,038-contract block of weekly 5/22 114-strike puts traded earlier at the ask price of $0.58 apiece. According to Trade-Alert, this block was bought to open, resulting in an initial cash outlay of $580,000 (number of contracts * premium paid * 100 shares per contract). This is the most the speculator stands to lose, should AAPL maintain its perch atop $114 through the close on Friday, May 22 -- when the series expires. Profit, meanwhile, will accumulate on a move south of the at-expiration breakeven mark of $113.42 (strike less premium).

On the charts, AAPL has not seen the south side of $114 since late January. In fact, the stock boasts a year-to-date lead of 12.3%, versus a 0.3% loss for the broader Dow. However, the security has hit a patch of technical turbulence since topping out at a record high of $134.54 on April 28, and was last seen lingering near $123.89.

Off the charts, Apple Inc. (NASDAQ:AAPL) launched a massive bond sale today, hoping to use the proceeds to fund stock buybacks and dividends. Separately, the Federal Trade Commission (FTC) has reportedly initiated an early stage inquiry into the company's Beats Music service.

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