The Apple iPhone Options Frenzy

Apple calls and puts have been trading at twice the usual pace

Sep 13, 2017 at 1:23 PM
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Unless you live under a rock, you're probably aware that Apple Inc. (NASDAQ:AAPL) debuted its highly anticipated line of new products yesterday. Along with the $999 iPhone X -- which won't be available until November, much to many analysts' dismay -- the company also unveiled another pair of iPhones, a new Apple Watch, a wireless charging pad, and Apple TV 4K. The shares of AAPL hit an intraday high not long after the event kicked off yesterday, but the optimism was short-lived, with the stock turning lower and in the red again today. Against this backdrop, we decided to take a closer look at Apple stock and the recent iPhone options frenzy.

As you can see below, Apple options volume skyrocketed during the highly anticipated event, peaking between 2:30 and 3:00 p.m. ET, just as AAPL stock was plumbing intraday lows. Total options volume ran at twice the average daily pace, with roughly 644,000 calls and 382,000 puts exchanged. 

apple options volume september 12
Chart courtesy of Trade-Alert

Most of the action centered on the September series of options, which expire at Friday's close. The now in-the-money September 162.50 put saw the biggest increase to open interest, with nearly 13,000 contracts added. Traders who bought the puts to open expect AAPL to extend its retreat south of $162.50 through the end of the week. Meanwhile, the September 157.50 put and September 172.50 call each saw close to 12,000 contracts opened yesterday.

Today, AAPL options are once again running at two times the average intraday pace, with about 355,000 calls and 173,000 puts exchanged so far. However, the biggest trade is what looks to be the closing of a bear call spread at the September 165 and 175 strikes, which essentially bet on a $165 ceiling for Apple shares.

The stock, in fact, touched a record high of $164.94 on Sept. 1, but has since pulled back nearly 3.6%. Whether it'll remain another dismal September for the FAANG stock remains to be seen. Over the past 36 years, Apple shares have averaged a September loss of 4.18%, ending the month higher just 33% of the time. At last check, AAPL stock is down 1.1% on the day, trading at $159.02. 


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