Sizing Up Apple (AAPL) Options

| February 6, 2013 | 0 Comments More

Apple Computer (AAPL) has seen a seesaw session and a flurry of activity in it’s options that expire on 2/8. After reaching a morning high of $466.5 on “speculation the company will return more cash to shareholders (Bloomberg)”, the stock fell into midday trading and dropped to an afternoon low of $457. Shares are now up 49 cents to $458.33 on the day and implied volatility in Apple options, as measured by VXAPL, is relatively big mover today, up 1.21 to 29.32.

The most active options are in the Weekly contracts that expire in just two days. In fact, of the 787K Apple contracts traded today, 354K, or almost half, are in the near-term Weeklys. By way of comparison, total open interest in the term is only 208K. The now out-of-the-money 460 and 465 call options are seeing the most volume. 470 calls, 455 calls, 455 puts, and 450 puts are the next most actives. The highs of the day, of $466.5, coincide ruughly with the highs of $465.73 on Jan 24, when the stock left a nasty gap on the chart after earnings missed expectations. Now, short-term players appear to be leaning on the bullish side and hoping that AAPL will begin to fill the gap. It’s failed so far and the key level to the downside to watch before the weekend is probably the $450 level, which corresponds with the Jan 24 lows and previous support/resistance level.

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Category: All Stocks, Large Cap Stocks, Technology Hardware & Equipment

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About the Author (Author Profile)

Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.