Double-Barreled Blow Doesn't Shake Apple Inc. (AAPL) Bulls

Apple Inc. (AAPL) is down once more, but options traders don't foresee another losing streak

by Alex Eppstein

Published on May 4, 2016 at 3:22 PM

A day after snapping its nearly decades-long losing streak, Apple Inc. (NASDAQ:AAPL) is lower once more. Hitting the tech stock is India's decision to prohibit the sale of imported used iPhones, along with a lost trademark battle in China. Amid the not-so-surprising drop in the shares, short-term options traders are making their presence known.

Diving into the data, the weekly 5/6 series accounts for seven of the 10 most active options. The three most popular are the 94-, 94.50-, and 95-strike calls, and it appears each is seeing some buy-to-open activity. In other words, these options traders foresee AAPL taking a bounce prior to week's end -- rather than duplicating the aforementioned (and historically rare) losing streak.

In recent weeks, however, it's puts that have been the options of choice among AAPL traders. Specifically, the tech stock's 10-day put/call volume ratio of 0.70 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) outstrips four-fifths of readings taken in the prior year.

At last check, Apple Inc. (NASDAQ:AAPL) has lost 1% to trade at $94.20. Since the tech stock's year-to-date high of $112.39 on April 14, the shares have surrendered over 16%. Plus, they're currently testing support at their 200-week moving average -- which hasn't been breached on a weekly basis since March 2009.

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