Apple Call Options Pop as Stock Soars

A large chunk of options bulls are betting on even more upside for AAPL stock

by Lillian Currens

Published on Aug 13, 2019 at 1:53 PM

News that the U.S. will be delaying tariffs on certain Chinese goods, including cell phones and laptop computers, has the Dow on the rebound today, with Apple Inc (NASDAQ:AAPL) at the helm. The tech giant has gained 4.1% so far, and is currently perched at $208.70 -- trading back near its pre-bear gap levels from earlier this month and eyeing its highest close since July 31.

Looking closer at the charts, AAPL sunk to a seven-week low of $192.58 last week, with trade fears sparking a huge sell-off for the shares of the iPhone maker -- days after they hit a year-to-date high on a short-lived post-earnings pop. The stock staged a hard rally near its 320-day moving average, however, and is now up more than 8% from last week's bottom. 

AAPL Chart Aug 13

Apple's surge has options volume running at an accelerated clip, with 324,000 calls across the tape, almost double the 178,000 typically seen at this point. The August 210 call is most active, with some buy-to-open activity detected. This suggest that traders are expecting even more upside for AAPL before the contract expires at the close this Friday, Aug. 16.

This surge in bullish behavior is a switch from recent options activity the equity has seen. While calls have been more popular than puts on an absolute basis during the past 10 days at the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AAPL's 10-day put/call volume ratio sits higher than 92% of all other readings from the past year, indicating the rate of put buying relative to call buying has been quicker than usual.

Echoing this is the security's Schaeffer's put/call open interest ratio (SOIR) of 1.42, which ranks in the 98th percentile of its annual range. This suggests that near-term traders have rarely been more put-biased toward the FAANG stock.

Whether it's calls or puts, Apple has been an attractive target for premium buyers over the last 12 months. AAPL's Schaeffer's Volatility Scorecard (SVS) registers at 95 out of a possible 100, which points to the stock's strong proclivity to make bigger-than-expected moves in the past year, relative to what the options market had priced in. 

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

Research Exposes Shortcut to Stock Market Wins
A simple way to stop picking losers, and start cashing in like Wall Street's elite.
Spotify Stock Shaky as Amazon Eyes Podcasts
Amazon's interest in podcasts puts SPOT in focus
AZO Shifts Higher After Earnings
AutoZone's fiscal third-quarter results beat estimates
One New Company Looks Ready To Clean Up On China’s Lithium Mess
Click to continue to advertiser's site.