Apple Options Volume Tops 1 Million After Stock Hits New High

Buffett said he bought more Apple stock

Aug 30, 2018 at 2:45 PM
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The shares of Apple Inc. (NASDAQ:AAPL) are trading up 2% at $227.41 -- the best Dow stock so far today -- and fresh off a record high of $228.26, after the tech giant confirmed its annual product reveal will be held on Thursday, Sept. 12, where a new line of iPhones is expected to be unveiled. The equity may also be reacting to a CNBC interview with Warren Buffett, who said Berkshire Hathaway (BRK.A) bought "just a little more" AAPL stock recently, and called the iPhone "enormously underpriced."

Should the stock hold these gains through the close, it will mark Apple's seventh straight win -- the longest streak since May. The shares are now pacing toward an August gain of 19.6%, which would be their best monthly return since April 2009 -- the month after that year's bear-market bottom. Year-to-date, the FAANG stock has added 34.5%.

Meanwhile, more than 1 million Apple options have traded so far today, with calls more than doubling puts. Speculators are targeting the stock's short-term trajectory, with the bulk of the activity centered at the weekly 8/31 and 9/7 series. In fact, two of AAPL's most active options today are the weekly 8/31 and 9/7 225-strike calls, where it looks like some positions are being bought to open, as trader eye more upside over the next week.

This is just more of the same for AAPL options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), 442,497 calls have been bought to open, compared to 204,171 puts. The resultant 10-day call/put volume ratio of 2.17 ranks in the 74th percentile of its 12-month range, suggesting the rate of call buying relative to put buying has been quicker than usual.

As Apple carves out new highs, though, call option premiums are approaching parity with their put counterparts. AAPL's 30-day implied volatility skew of 2.6% ranks in the low 6th percentile of its annual range.


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