Apple: Four big coronavirus options trades Monday, one worth $2.24 million

From Benzinga, which offers alerts of unusual option activities to its paying subscribers:

On Monday, Benzinga Pro subscribers received 21 option alerts related to unusually large Apple option trades. Here are some of the largest:

    • At 9:36 a.m. ET, a trader sold 1,430 Apple put options with a $320 strike price expiring on Friday. The contracts were sold near the bid price at $13.577 and represented a $1.94 million bullish bet.
    • At 9:50 a.m. ET, a trader bought 1,166 Apple call options with a $300 strike price expiring on March 20. The contracts were purchased near the ask price at $17,839 and represented a $2.08 million bullish bet.
    • At 9:58 a.m. ET, a trader sold 1,180 Apple call options with a $300 strike price expiring on Feb. 21. The contracts were sold near the bid price at $14.847 and represented a $1.75 million bearish bet.
    • At 12:02 p.m. ET, a trader sold 11,595 Apple call options with a $300 strike price expiring on Feb. 14. The contracts were sold at the bid price of $14.10 and represented a $2.24 million bearish bet.

My take: Anybody here want to take credit for that last one?

2 Comments

  1. Gregg Thurman said:
    For years I have been trying to discern some sort of indicator from these reports. So far I’ve been unsuccessful.

    Come Monday morning I’ll be looking again at in-the-money Call Spreads with a Friday (February 24) Close and a 20% ROI. All three of my current positions have maxed out their profitability. The only one that may be subject to another irrational selloff is the FEB 17 $315/$317.50 Call Spread. I believe the other two are too far into-the-money to be affected by more of the coronavirus silliness.

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    February 6, 2020
  2. Kathy Corby said:
    Two things to remember about Options. Number 1: Selling an option is merely a way of saying “pay me to buy the stock“ (in the case of sold puts) or “pay me to sell the stock” (in the case of sold calls.) The first two trades could easily have been the same trader, executing a variation on a “synthetic” purchase of the stock, that is to say mimicking the gains or losses that the stock itself would have, but with minimal use of capital. The second two trades were a way of saying “Pay me to sell the stock.” The trader likely already owns the stock, has decided to divest herself of it, almost certainly at a profit, and was well paid for agreeing to do so. Her effective sale price will be $314 plus or minus, and if Apple does in fact finish below that price, she will pocket the money and it will sweeten the drop in the stock, which she will then be able to keep.
    The second thing to remember is that only a very small percentage of options are actually exercised, that is to say, result in the sale or purchase of actual shares. Most of them are simply sold back to the market, or brought back cheaper, with the aim of generating a gain. For instance, if the first two trades did in fact constitute a synthetic purchase, the trader has already made a few hundred thousand dollars based on today’s price action, can turn the options in to the market tomorrow, and have one hell of a party. No need to buy the stock or sell the stock. The call seller Is still waiting to see how her bet turns out. Let’s hope she loses.

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    February 6, 2020

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