Apple (AAPL) Cracks, Volatility Spikes

| December 14, 2012 | 0 Comments More

Apple (AAPL) drops $18.69 to $511 Friday on heavy volume of 15 million shares following reports of a lackluster reception to the iPhone 5 in China and after UBS cut its price target on the stock to $700 from $780. UBS also lowered its earnings esimates for March, June and September quarters due to revised estimates for iPad and iPhone sales. Shares are now down 13.3 percent in the past two weeks and within striking distance of the November low of $505.75 per share. On the options front, more than a half million contracts have already traded in Apple and an impressive 46 percent, or 230K, is in Weekly options that expire after today. Another 20.5 percent of the flow is in the December options, which expire at the end of next week. Weekly upside 515 calls and 520 calls, and downside 510 and 500 puts, are the most actives. Meanwhile, implied volatility in Apple options, as measured by VXAPL, is up 3.65 to 43.44. The index hit a high of 48.19 this morning and its highest levels since April 23, the day before the stock halted a two-week slide and rallied nearly 9 percent on earnings news.

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

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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.