Apple Inc. (AAPL) Call Players Take Aim at the Century Level

Apple Inc. (AAPL) calls are hot today, but not everyone is bullish

by Josh Selway

    Published on Jul 18, 2016 at 2:28 PM

    Options traders have been unusually bearish toward Apple Inc. (NASDAQ:AAPL) in recent weeks, but call buying is back in style today. Looking at the numbers, AAPL call volume is almost doubling put volume, with the stock's single-day put/call volume ratio of 0.58 ranking in just the 18th annual percentile. In fact, the seven most popular AAPL options today are calls, with much of the activity taking place at the closely watched $100 level

    Specifically, two of the more popular AAPL options today are the weekly 7/22 and August 100 calls. It appears mostly buy-to-open action is occurring at the weekly option, meaning traders are betting on AAPL shares topping $100 by the end of this week, when the options expire. The August call, meanwhile, could be seeing a mix of buying and selling. So, while many are expecting the stock to top the century mark, others are betting on this level to act as resistance through August options expiration, at the close on Friday, Aug. 19. 

    Given AAPL's technical set-up, betting on resistance at this level doesn't seem like the worst idea. For instance, the shares were unable to overcome the $100 mark back in late May and early June. Making matters worse, the stock's 100-day moving average sits right overhead at $100.13 -- AAPL's intraday high. While this was the first time the stock has traded in triple-digit territory since June 6, the shares were last seen below the century mark, at $99.97. 

    Daily Chart of AAPL July 18

    In the meantime, analysts have been growing more cautious, with Apple Inc. (NASDAQ:AAPL) earnings set for release after the close next Tuesday, July 26. However, 26 of 31 analysts still recommend buying AAPL, and the stock's average 12-month price target of $122.90 represents a steep premium to current levels -- showing there's potential for additional bearish attention to come the stock's way. In other news, Apple has reportedly called for simplified rules for royalties related streaming music services, setting payments to songwriters at 9.1 cents for each 100 times a song is played.

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