Weekly Options Hot as Apple Inc. (AAPL) Hits New Low

Apple Inc. (NASDAQ:AAPL) hit its lowest perch since June 2014 earlier

May 6, 2016 at 2:14 PM
facebook twitter linkedin


It's another down day for Apple Inc. (NASDAQ:AAPL), with the tech stock 1% lower at $92.31, and fresh off a new annual low of $91.85. In fact, the shares of AAPL have only finished in positive territory in one of the past 12 sessions -- notching their longest losing streak in almost two decades along the way -- and are on pace to close south of their 200-week moving average for the first time since March 2009. Against this backdrop, options traders are hustling to bet on where AAPL will settle the week, with the weekly 5/6 series accounting for nine of the stock's 10 most active options.

Most active is AAPL's weekly 5/6 93-strike call, where there looks to be a mix of buy- and sell-to-open activity occurring -- a theory echoed by data from the International Securities Exchange (ISE). Those purchasing the calls to open expect AAPL stock to bounce back above $93 by tonight's close, when the weekly series expires. Conversely, those writing the calls to open expect this strike to serve as a short-term ceiling.

More broadly speaking, while put buyers have been active at the major options exchanges in recent weeks, short-term speculators have shown a clear preference for calls. Specifically, AAPL's Schaeffer's put/call open interest ratio (SOIR) of 0.62 rests lower than all other comparable readings taken in the past year. In other words, options traders are more call-heavy now toward AAPL options set to expire in three months or less than they've been at any other point over the past year.

Looking ahead, Apple Inc. (NASDAQ:AAPL) CEO Tim Cook has scheduled a trip to China for later this month. Earlier this week -- and in the wake of the tech titan's big earnings miss -- Cook waxed optimistic on the potential for sales growth in Beijing.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical  levels, and top economic stories straight to your inbox.

 

 

 

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners