Consumer tech giant Apple (AAPL) is up 32% over the past year, slightly outperforming the overall stock market. One trader sees shares trending higher in the coming weeks.
That’s based on the January 17 $267.50 calls. With 21 days until expiration, 3,840 contracts traded compared to a prior open interest of 150, for a 26-fold rise in volume on the trade. The buyer of the calls paid $1.07 to make the bullish bet.
Apple shares recently traded for about $258, so the stock would need to rise by $9.50, or about 3.7%, for the option to move in-the-money.
It would also mean Apple continues to break to new highs, since $258.21 is already the stock’s 52-week (and all-time) high.
Apple has had a mixed year. Revenues have continued to grow, rising 6%. But the company has had little interest in any of its latest products, and overall earnings are down by 36%.
Action to take: Investors may like Apple over the long-term, as the company is a cash-generating machine that has been used to fuel massive share buybacks and a modest dividend, currently at 0.4%.
It may make sense for new investors to buy a partial stake here, and use any 10%+ pullback in shares to add to that position over time.
For traders, a stock in an uptrend is likely to keep going. The January 17 $267.50 calls are unlikely to move in-the-money, but could still see mid-double-digit returns before expiration in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
