Checking in With AAPL After Last Week's Earnings

The equity looks to be making a comeback today

Deputy Editor
Feb 1, 2021 at 3:20 PM
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Nearly a week has passed since Apple Inc (NASDAQ:AAPL) released its highly anticipated fiscal first-quarter report. It might feel like longer, but that's just the Reddit-fueled news cycle we're all currently stuck in. And while the iPhone retailer's revenue topped $100 billion for the first time ever, the positive price action expected by many on Wall Street did not follow, due in part to last week's extremely volatile trading conditions. It looks like the tech giant could be on the rebound, though. The stock is up 1.9% at $134.43 this afternoon, maintaining footing atop long-time support at its 40-day moving average. 

AAPL Chart Feb 1

Meanwhile, AAPL's pullback has done little to deter option bulls. In fact, the security landed at the top of Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the last two weeks, with new names to the list highlighted in yellow. According to White, 5,740,333 calls and 1,975,351 puts were exchanged over this two week time period. The most popular position was the 1/29 140-strike call, followed by the 150-strike call in the same series. 

MAO chart Feb 1

This preference for bullish bets is being echoed in today's trading. So far, 945,000 calls have crossed the tape, compared to 381,000 puts. The weekly 2/5 135-strike call is seeing plenty of action, while the 140-strike call in the same series is also popular. With positions being opened at both contracts, this suggests traders are expecting more upside for AAPL by the time these positions expire this Friday. 

This extreme optimism is unusual. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), AAPL's 10-day call/put volume ratio of 3.45 stands higher than 90% of readings from the past year. This means calls have been picked up a much quicker-than-usual pace during the past two weeks. 

Lastly, the FAANG name's Schaeffer's Volatility Scorecard (SVS) sits at up at 89 out of 100. This means AAPL has exceeded option traders' volatility expectations during the past year -- a good thing for options buyers.

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