For a stock that has not disappeared anywhere for six months, Apple Certainly options traders are excited.
Implied volatility in the stock suggests a 3.5% upside after tonight’s earnings, compared to an average rise of only 1.8% after the last four quarterly reports. For context, in last night’s Big Four tech reports, Amazon and Microsoft are underperforming their implied moves, while Alphabet and Meta are outperforming theirs.
Call volume and premiums are outpacing puts in Apple options, but the message is not necessarily bullish. Now more calls are trading at the ask price than the bid price, which means more traders are buying calls than selling calls. There has been a change since the market opened this morning, when the spread was almost equal.
Some of the largest individual trades of the day were along the way, with one trader collecting nearly $1 million in premium by selling both $290- and $300-strike calls at Dec. 18 expiration. A similar trade collected more than $3 million by selling both 240- and 250-strike calls expiring on May 15.
Bearish signs in the stock One can look to recent history as a guide: Apple stock has fallen after five of its last six earnings reports and after seven of its last ten.
Still, option flows are not as one-directional as they were ahead of other recent reports. At least one large trader felt the need to pay more than the market asking price for $330,000 of the 320-strike calls expiring on July 17.
