Unusual Options Activity In Apple

Apple had a great week last week.  Last Tuesday, Apple reported their Q3 earnings and beat Wall Street estimates.  Despite the weakness in iPhone sales, the growth in wearables and the service segment gave investors the confidence to bump the stock price up the next several days. 

However, that stellar week that they were having came to a screeching halt when Trump twitted that the U.S. was going to impose a 10% tariffs on $300 billion worth of goods imported from China starting Sept 1^st.  The issue is these goods consist primarily of consumer goods such as sneakers, apparel and devices such as iPhones.

And what went up, came down quickly.  What was a $220 stock last Weds., after factoring the more than 5% drop today closed below $190 today.

Because Apple gets about 20% of their revenue from China, many all Wall Street are saying this could hurt iPhone demand by as much as 10%. 

Source

Nevertheless, the recent price action and potential impact to earning didn’t stop the Smart Money from buying short term bullish call options today.  The Smart Money bought an astounding 48,000 call options with a strike price at $200 that expire this Friday.

Because of the size of Apple and their market cap, they have become a proxy for the US equity markets.  So if Apple can get back to $200 by Friday, expect the bleeding/bloodbath in the Markets to stop…at least short term.  

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.