Q2 STOCKS TO BUY

How Option Traders Are Playing the Apple Inc. (AAPL) Event

Apple Inc. (AAPL) puts have been hot ahead of the Sept. 9 reveal

Sep 8, 2015 at 2:18 PM
facebook X logo linkedin


It might be a holiday-shortened week, but it's a biggie for Apple Inc. (NASDAQ:AAPL). However, ahead of the company's much-buzzed-about event tomorrow, AAPL option players have been placing seemingly bearish bets at an annual-high clip.

On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day put/call volume ratio sits at 0.79 -- above all other readings from the past year. In other words, option buyers haven't picked up AAPL puts over calls at a faster rate in the last 52 weeks. 

The equity's October 90 put has been the most active during the past 10 sessions, with nearly 240,000 contracts traded. Of the nearly 39,000 contracts opened since early June, roughly 80% were bought. By purchasing the puts to open, the buyers either expect AAPL to breach $90 -- which would mark a new annual low -- by expiration on Friday, Oct. 16, or they're looking to protect their AAPL shares, should the stock take a turn for the worse. 

Meanwhile, the stock's deep out-of-the-money October 60 put has seen the biggest jump in open interest over the last two weeks. However, most of those options were sold to open. By writing the puts to open, the sellers expect AAPL to remain north of $60 -- the stock is currently trading around $111.10 -- through the close on Friday, Oct. 16. In this instance, the puts will expire worthless, allowing the trader to pocket the initial premium paid, which represents the maximum potential reward. 

Today, option players are extremely short-sighted. Nine of the top 10 options expire at Friday's close, with calls the options of choice. It looks like pre-event bulls are buying to open the weekly 9/11 112- and 115-strike calls, which will move into the money if AAPL topples the strikes by the end of the week.

On the charts, Apple Inc. (NASDAQ:AAPL) was last seen 1.7% higher, as traders weigh speculation ahead of tomorrow's event, as well as reports the company is making strides in the artificial intelligence realm (and apparently in the exclusive content realm, as we reported last week).  The equity hit a new annual low of $92 on "Black Monday" -- Aug. 24 -- but found a foothold atop its 20-month moving average.

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter