Options Hot as Apple Stock Heads Toward Worst Day in a Year

Apple is the worst Dow stock today

Jun 9, 2017 at 3:18 PM
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Apple Inc. (NASDAQ:AAPL) has seen a surge in options volume today, with more than 708,800 contracts traded -- two times what's typically seen at this point in the trading session. With AAPL shares down 4.6% at $147.80 -- on track for their worst day in over a year, and the worst Dow stock -- the weekly 6/9 series is hot, as traders bet on where Apple stock will settle at tonight's closing bell.

With less than an hour left to go in today's trading, the weekly 6/9 152.50- and 155-strike calls have seen heavy attention in Apple's options pits, with more than 93,500 contracts traded. New positions are being initiated at each of these strikes, and it seems likely that some of the activity is of the buy-to-open kind. If this is the case, the goal is for AAPL to swing north of the respective strikes by tonight's close, when the weekly options expire.

More broadly, the June 155 call is home to AAPL's top open interest position, with more than 102,000 contracts outstanding. Data from the major options exchanges confirms the bulk of this activity is a result of speculative players initiating new long positions, as they bet on Apple shares closing north of $155 at next Friday's close, when front-month options expire.

Despite this afternoon's plunge, AAPL stock's longer-term trend has been to the upside, with the shares boasting a 30% year-to date gain -- fresh off a record high of $156.65. Today, though, Goldman Sachs said outperforming FANG stocks have now morphed into the FAAMG trade, to include Apple and Microsoft, and have created "positioning extremes, factor crowding and difficult-to-decipher risk narratives." In addition, on the final day of Apple's WWDC, BBG warned that new iPhone iterations could lag on high-speed data links.

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