Apple Options Remain Highly Elevated, With Bias As Well (AAPL)

Posted in Options 
October 26th, 2010

Apple Inc. (NASDAQ: AAPL) remains the key stock and darling of America when it comes to this rally’s favorite darling stock.  Shares today are barely positive at $309.00.  That remains under the all-time highs from right before earnings but it is also more than $10 from the after-hours lows after earnings.  Options traders are still using speculative puts and calls to get their exposure without paying $300+ per share.  We wanted to take a look at the most active options that are being seen in Apple.

Apple has weekly option expiration contracts, and we are seeing volume there for the contracts that expire on October 28, 2010.  We have seen more than 9,300 of the weekly $310 CALLS trade versus an open interest of almost 5,200 contracts.  There have also been more than 9,700 contracts of the weekly $320 CALLS versus an open interest of almost 11,400 contracts.  Even the weekly $330 CALLS have seen 678 contracts trade versus an open interest of 2,147 contracts.

The weekly PUTS have also seen a whopping 10,062 contracts trade versus an open interest of 7,392 contracts in the open interest.  The $290 Weekly PUTS have seen 1,377 contracts trade versus an open interest of 3,389 contracts.

Going out to November shows and actively traded Apple as well:
CALL$    Vol.    OpInt
$310    7,120    34,883
$320    6,950    32,523
$330    5,156    28,457
$340    2,216    25,658
PUTS$    Vol.    OpInt
$270    1,754    16,917
$280    1,960    20,339
$290    3,605    27,231
$300    9,030    28,883

The pricing bias is also more active and more geared toward the long side of the story on the longer-dated LEAPS, implying that puts are cheaper than calls.  Going $40 out of the money in either direction is an interesting exercise.  The JAN-2013 $350 CALLS cost about $50.00 per contract.  The JAN-2013 $270 PUTS cost about $44.00 per contract.

The pricing bias in the JAN-2012 shows some of the same in the same speculative out of the money strike prices.  The Apple JAN-2012 $350 CALLS cost approximately $31.50 versus about $28.60 per contract for the $270 PUTS.

The Apple craze just won’t go away.


12:30 PM EST

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