CNBC: Heavy trading Monday in Apple weekly $155 calls (video)

From “Options Action: Big Tech earnings tomorrow” which aired on CNBC Pro after the markets closed:

Optimize Advisors’ Mike Khouw digs into Big Tech ahead of tomorrow’s earnings.

Khouw’s power points:

  • Apple represented more than 4% of all the options traded (not that unusual)
  • There were 2.7 times more calls than puts
  • That implies, he says, that the stock could move +/- 4%
  • With Apple’s $2.48 trillion cap that works out to a swing of $100 billion either way
  • The most active options were the $155 calls at $109
  • Buyers of those calls, Khouw says, are making a bullish bet that AAPL could rally through that $155 strike price by more than the dollar and change they paid.

Cue the video:

My take: A bullish session all around, with positive comments from Tim Seymour, Dan Nathan, Karen Finerman and Guy Adami.

2 Comments

  1. Michael Goldfeder said:
    I noted that the short interest which had been on a large decline, just jumped back up as follows:

    Short Interest was (108.937) Million as of June 15, 2021.

    Short Interest was (90.213) Million as of June 30, 2021.

    Short Interest was (96.355) Million as of July 15, 2021.

    My thought after watching this clip is that the CNBC crowd is now coming around to the reality that Apple has become more of a consumer staple that not only makes great consumer products that are in tremendous demand because of the work and learn from home effect from the pandemic, but their FCF is staggering.

    Tomorrow after the closing bell ought to be interesting.

    4
    July 26, 2021
  2. Gregg Thurman said:
    Volume is great, but the real question is: how many of those trades increase Open Interest vs just being churn?

    OPEN INTEREST
    July 30 $150 Call 76,461
    July 30 $155 Call 67,709

    TODAY’S VOLUME
    July 30 $150 Call 111,459
    July 30 $155 Call 112,257

    We won’t know how many of today’s trades were additive to Open Interest for another several hours. Personally I think activity in the $149 Call is more telling as the break even point (based on today’s Closing print) is $151.98.

    $150 Call break even $152.50
    $155 Call break even $155.92.

    Time decay and Delta moves of the $155 Call are going to pretty much cancel each other out, unless there is a significant price increase (beyond $156, a $7 move from today’s Close) in AAPL post earnings. Given the markets reaction to blow out numbers after the last two reports, I think that expectation is highly speculative.

    I’d be pleased to see it, but I’m not willing to expose my capital to that kind of risk, for such a small reward. I can make a larger ROI with my Call Spread that has a $149.xx break even.

    0
    July 26, 2021

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