Apple Inc. (AAPL) Put Volume Nears Peak Levels

Apple Inc. (NASDAQ:AAPL) put buyers have set their sights on the out-of-the-money October and November 90 strikes

Sep 29, 2015 at 10:19 AM
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Put players have been piling into Apple Inc.'s (NASDAQ:AAPL) options pits in recent weeks, per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, the stock's 10-day put/call volume ratio has jumped to 0.81 from 0.70 over the past two weeks, and now ranks higher than all other annual readings. In other words, puts have been bought to open over calls at a faster clip than at any point in the past year.

Echoing this is AAPL's Schaeffer's put/call open interest ratio (SOIR) of 0.85, which sits higher than 79% of all similar readings taken in the last 12 months. Simply stated, short-term speculators are more put-heavy than usual. Additionally, the 10-day moving average of AAPL's out-of-the-money (OOTM) put/call skew settled last night at 1.19 -- near the top of its 52-week range.

Yesterday, the equity's October and November 90 puts were in heavy rotation, and according to data from the ISE, CBOE, and PHLX, a number of these options were bought to open. Widening the scope reveals these strikes have been quite popular among put buyers in recent months, with 38,117 contracts bought to open at the October strike since July 1, and 10,741 new positions purchased at the November strike since July 29.

By initiating new long positions at these OOTM strikes, the goal is for AAPL to settle south of $90 at the respective expiration dates of Friday, Oct. 16, and Friday, Nov. 20. With AAPL currently lingering near $113.07, delta on the front-month put is docked at negative 0.05, and negative 0.11 on the back-month put. Regardless of where the stock finishes at options expiration, though, both sets of put buyers can rest easy knowing the most they stand to lose is the initial premium paid.

Technically speaking, AAPL has been trying to dig itself out of a hole since tumbling to an annual low on Aug. 24, up 22.8% at $113.01. However, the shares are currently staring up at a handful of trendlines, including their 50-day and 320-day moving averages. In fact, Apple Inc. (NASDAQ:AAPL) was swiftly rejected by its 320-day moving average yesterday, despite reports of record-setting iPhone sales.
 

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