Eleventh-Hour Options Betting Abounds on Apple Inc. (AAPL)

Options traders on both sides of the aisle are targeting Apple Inc. (NASDAQ:AAPL) today

by Josh Selway

Published on Apr 22, 2016 at 2:45 PM
Updated on Apr 25, 2016 at 8:58 AM

Apple Inc. (NASDAQ:AAPL) has not been immune to today's sell-off among tech stocks, with shares of the iPhone maker falling 0.9% to $105.04. Aside from the broad-market headwinds, AAPL is trading lower in light of reports that its online book and movie services have been shut down in China. More negative iPhone news is also hitting the stock, as Raymond James lowered its unit sales projections on the iconic smartphone. In the meantime, AAPL options are trading at an accelerated pace. 

The four most popular AAPL strikes today belong to the weekly 4/22 series, with a mix of buy- and sell-to-open activity taking place at the 105- and 106-strike calls and puts, as bulls and bears alike place eleventh-hour bets. Elsewhere, the May 114 call was the target of a major skeptic, as it appears one trader sold to open 4,040 contracts in the hopes that the shares will hold below $114 through front-month options expiration at the close on Friday, May 20. 

Looking back, short-term AAPL speculators have generally favored calls over puts. For instance, the stock's Schaeffer's put/call open interest ratio (SOIR) of 0.71 ranks in the low 23rd percentile of its annual range, meaning traders targeting options that'll expire within three months are more call-skewed than normal. 

Elsewhere, short interest is almost nonexistent on AAPL, accounting for just 1% of its float, However, short interest jumped 17% over the last two reporting periods, suggesting short sellers are hoping for a post-earnings sell-off. 

Today just adds to the recent technical weakness seen from Apple Inc. (NASDAQ:AAPL). Currently, the stock is set to close below its 10-month trendline for a ninth consecutive month, after it supported the shares for roughly two years, and guided them to all-time highs roughly a year ago. Looking ahead, all eyes will be on AAPL when the company reports fiscal second-quarter earnings after the bell on Tuesday, April 26.

Monthly Chart of AAPL

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