Option Contracts on Apple Surge After Earnings Report

Option volume jumped big time this morning on Apple stock. After the stellar earnings reported last night and the increase in price today, traders are jumping in hoping to profit from the move. Check out the following article to see which way they’re betting it will go from here.

Traders want instant gratification in Apple today as the tech giant soars to an all-time high after crushing earnings estimates last night.

Option volume has surpassed 400,000 less than an hour into the
trading session, already nearly  quadruple their daily
average. Even more noteworthy is the fact that short-term weekly
contracts dominate the flow and account for more than one-third of the total.

Those contracts expire this Friday, so they require the stock to
move in a hurry or will end up worthless. AAPL’s Weekly 450 calls
traded more than 20,000 times, with large blocks purchased for
$3.45 to $3.95. The Weekly 455 calls were the second most active
and were purchased for $1.45 to $2.10. Overall calls outnumbered
puts by more than 2 to 1.

While those large trades were bullish, the overall balance of the
AAPL option activity is less clear. In total, more calls were sold than bought, according to optionMONSTER’s tracking programs. Puts, which make money from shares dropping, were also bought overall.

AAPL has also been surrendering its gains since the morning began. It gapped higher by 8 percent at the open gain but is now up a little more than 6 percent to $445.94.

The move follows a Apple’s blockbuster earnings release last night. The strong results, which followed a disappointing report in October, soothed fears about the company losing its way after the death of co-founder Steve Jobs.

Go to NASDAQ for the entire story

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