Unusual Options Activity: Apple (AAPL)

Consumer tech giant Apple (AAPL) has been pushing to new highs in recent weeks. One trader sees the trend continuing throughout the month of September.

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  • That’s based on the October 1 $180 calls. With 30 days until expiration, over 35,270 contracts traded against an open interest of 269, for a massive 131-fold jump in volume. The buyer of the calls paid about $0.23 to make the trade.

    While shares have moved higher in recent sessions, they currently trade around $153. Shares would need to rise $27, or 17.6 percent this month, to move in-the-money.

    Shares of Apple jumped over 3 percent on Monday to a new all-time high on news that the company’s next iPhone would have satellite service for emergencies. A number of satellite companies also rose on the news.

    Action to take: Apple remains a great, cash-generating firm that’s one of the cheaper names in big tech. Even with the recent move higher, shares are up 15 percent in the past year, about half the return of the S&P 500, a shift that may change given the company’s strong earnings.

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  • Shares are worth buying for the long haul. While the stock’s dividend is a paltry 0.6 percent, the payout ratio is low and the company has a history of growing the dividend.

    For options traders, the October calls have little time on them, but have the potential for a triple-digit move before they expire, so traders may enjoy a quick potential double in the next few 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 of the companies mentioned in this article.

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