Options Bulls Bet on Bigger Apple Stock Gains

The broader trend in Apple's options pits has been bearish

Aug 20, 2019 at 10:48 AM
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Apple Inc. (NASDAQ:AAPL) stock is trading up 0.4% at $211.25, as buzz swirls over the tech giant's new streaming service, Apple TV+. Specifically, Bloomberg reported the subscription service will launch in November -- a month also expected to see the premier of Walt Disney's (DIS) Disney+ -- for $9.99 per month. Additionally, Apple could be committing $6 billion for original content, according to the Financial Times, higher than previous estimates of roughly $1 billion.

This positive price action has AAPL stock joining just a handful of other blue chips in positive territory this morning, and brings its year-to-date lead to 33.8%. The shares have been climbing since an early July test of $170, with a recent pullback contained by double-barreled support at Apple's 120-day and 320-day moving averages.

Today's options traders appear to be positioning for even more upside from the tech stock through week's end. Amid relatively light volume, the weekly 8/23 215-strike call is AAPL's most active option so far, and it looks like traders may be buying to open positions for a volume-weighted average price of $0.92. If this is the case, breakeven for the call buyers at the close this Friday, Aug. 23, is $215.92 (strike plus premium paid).

More broadly, options players have grown increasingly skeptical of AAPL. The September 200 put is home to peak front-month open interest of nearly 34,000 contracts, and data from the major options exchanges confirms the bulk of these positions were bought. While these could represent traditional bearish options bets, it's also possible shareholders are initiating an options hedge to guard against any downside risk.

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