Apple Inc. (AAPL) Options Traders Target $100 as Rumors Abound

Options traders are betting on Apple Inc. (NASDAQ:AAPL) hitting $100 by week's end

Josh Selway
May 25, 2016 at 2:30 PM
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Apple Inc. (NASDAQ:AAPL) has been on the rise ever since Warren Buffett's Berkshire Hathaway Inc. (NYSE:BRK.A) disclosed a stake in the tech stock last week. In fact, AAPL is on pace to close higher for the fourth straight day, last seen up 1.7% at $99.52, and closing in on the $100 level once again -- which is also home to the stock's 100-day moving average. Judging by today's options activity, traders are expecting AAPL to hit triple-digit territory sooner rather than later. 

Specifically, AAPL call options are trading at an accelerated pace, with the weekly 5/27 series accounting for eight of the 10 most popular strikes overall. Leading the way is the 100-strike call, and it looks like traders are buying to open positions, betting on the stock toppling $100 by Friday's close, when then weekly options series expires. This is an opportune time to place short-term wagers on APPL, too, since its Schaeffer's Volatility Index (SVI) of 19% sits just 7 percentage points from an annual low. In other words, the options market is pricing in lower-than-usual near-term volatility expectations for the stock. 

It's not unusual to see short-term speculators target AAPL calls. The stock's Schaeffer's put/call open interest ratio (SOIR) of 0.62 indicates call open interest outweighs put open interest among options set to expire within three months. Plus, this SOIR is just 4 percentage points from an annual low, which tells us this sort of call-skew is rather uncommon for the tech stock. 

As was mentioned, Apple Inc. (NASDAQ:AAPL) has been on the mend recently, trying to make up for its historic post-earnings losing streak. Helping the stock move higher today are various reports circulating on Wall Street. For starters, there's talk AAPL will follow Alphabet Inc's (NASDAQ:GOOGL) lead and try to challenge Amazon.com, Inc.'s (NASDAQ:AMZN) Echo with a similar device of its own. And, on top of the latest iPhone 7 gossip, other reports suggest Apple is exploring charging stations for electric vehicles

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