Options Alert: Call Volume Swells in Apple as IPhone 14 Hits the Market


The options activity may be turning bullish in Apple as the smart-phone giant rolls out the iPhone 14.

Some 1.1 million call contracts traded in AAPL yesterday. That was the most since the earnings came out in late July, according to TradeStation data.

Our analytics shows another trend in the put/call ratio, which climbed above 1 last month for the first time in at least five years. That bearish signal has reversed sharply this month as a series of positive headlines boost sentiment toward the stock. (See chart below.)

(Increased call volume is potentially bullish because they fix the price where investors can purchase a security. Puts are just the opposite because they give traders the right to sell. The put/call ratio compares volumes in the two kinds of options. Higher readings are typically considered bearish. It’s not a precise measure of buying and selling but it can give a general picture of sentiment.)

Yesterday’s most active options were the short-term weekly calls expiring this Friday. The 16-September 165 calls traded more than 159,000 contracts against open interest of 98,934. The 16 September 162.50 calls changed hands more than 129,000 times, about 5 times the previous positioning.

Apple (AAPL), daily chart with 50-day moving average. The one-month put/call ratio and daily call volume are also shown.

Apple Jumps

AAPL closed at $163.43 on Monday, up 3.85 percent — its biggest gain since May 27. The move came after the company revealed the new iPhone 14 Pro and Pro Max aren’t available for delivery until mid-October. Several analyst said the data showed strong demand for the new handset, especially compared with the previous iPhone 13.

“The extended lead times are especially impressive given that Apple has increased iPhone prices in some regions,” BofA Securities said in a note on Monday.

Wall Street also noticed longer wait times for the higher-priced Pro and Max models, which could potentially boost quarterly revenue. China appears to be especially strong after CEO Tim Cook opted not to raise prices in the country. That may relieve investors worried that China’s weak economy would hurt iPhone demand.

Advertising, IOS 16

At least two other positive stories have emerged for AAPL in the last week:

  • Analytics firm Appsumer said on September 6 that AAPL is gaining market share in online advertising. The study, cited by CNBC, said tighter iOS privacy rules boosted adoption in the second quarter. Meta Platforms (META) and Alphabet (GOOGL), the parents of Facebook and Google, both lost share.
  • AAPL released iOS 16 on Friday, available on iPhone 8 and news. The new operating system adds features like editing iMessages and scheduling emails.

In conclusion, AAPL has drifted for months as investors worry about higher interest rates, supply-chain problems and weakness in China. But Wall Street seems to be viewing recent developments favorably, and options traders could be following the trend.

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