Betting big on Apple options

From Benzinga’s “Here’s How Large Option Traders Are Playing Apple Following Coronavirus Sell-Off“:

On Monday, Benzinga Pro subscribers received 26 option alerts related to unusually large Apple option trades. Here are some of the largest:

    • At 10:52 a.m. ET, a trader sold 530 Apple put options with a $290 strike price expiring on July 17. The contracts were sold near the bid price at $25.516 and represented a $1.35 million bullish bet.
    • At 11:21 a.m. ET, a trader sold 621 Apple put options with a $265 strike price expiring on July 17. The contracts were sold near the bid price at $13.512 and represented a $839,095 bullish bet.
    • At 1:59 p.m. ET, a trader bought 500 Apple put options with a $250 strike price expiring in June 2021. The contracts were purchased at the ask price of $21.50 and represented a $1.07 million bearish bet.
    • At 2:15 p.m. ET, a trader sold 999 Apple put options with a $290 strike price expiring Friday. The contracts were sold at the bid price of $6.05 and represented a $604,395 bullish bet.

My take: Always fun to see million dollar bets on something as ephemeral a bunch of Apple options, but without knowing what else is in each trader’s portfolio, Benzinga can’t really tell from these trades which is bullish and which bearish.

See also: The Apple 3.0 COVID-19 archives

One Comment

  1. Gregg Thurman said:
    Benzinga is a horrible place to get investment info.

    The above article is a great example of its shortcomings. EVERY trade includes a Buyer and a Seller, ergo for every Bullish investment there is an equal, offsetting Bearish investment. It doesn’t matter if the instrument of choice is a Put or a Call. One side of the trade is Bullish while other side is Bearish.

    Then there are the motives for taking an options position to consider. Benzinga tries to hedge its Bull/Bear assumptions by injecting motive into the equation. Someone may buy Puts while not believing an equity will decline, but do so as protective just in case the equity does decline. The market even has a category labeled protective in its options naming convention. Short sellers could hedge there their Short position by purchasing Calls (just in case).

    Personally, I do not buy options to lock in an acquisition price in the event shares suddenly rise. I buy for the income derived from selling those profitable contracts to others. Besides, where else can you potentially (and consistently) make 20+% on your investment in 5 days (Monday to Friday)?

    Bottom line is that options do not signal future direction of an equity BECAUSE while the Call Buyer may be Buying as a Bull, the Seller is Selling as a Bear. The opposite is true re: Puts. A Put Buyer is Buying as a Bear, the Put Seller is Selling as a Bull.

    1
    March 3, 2020

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