Apple Attracts Millions of Dollars in Bullish Option Trades as Outlook Improves: Options Chatter

Luzi Ann Santos joined discussion · Jan 31 17:51

$Apple (AAPL.US)$ attracted institutional investors taking millions of dollars in bullish option positions after the iPhone maker quelled market concerns over the company's prospects in yesterday's earnings call.

CFO Kevan Parekh forecast total revenue to grow low to mid-single digits in the fiscal second quarter ending on March 31, from a year earlier. Gross margin is expected to range between 46.5% to 47.5%, he said during the earnings call.

(To see Apple's options chain, click here. For the unusual option activities, click here. See the options ranking led by Nvidia and Tesla, click here.)

Apple Attracts Millions of Dollars in Bullish Option Trades as Outlook Improves: Options Chatter

For the previous three months, Apple reported that revenue rose about 4% to a record $124.3 billion, surpassing analysts' estimates. Sales of iPhones in the quarter that ended in December rose to $69.14 billion, missing the Bloomberg consensus that called for $71.04.

Revenue from China came in 14% below analysts' expectations at $21.57 billion. Over half of the 11% decline in sales in China was driven by the change in channel inventory at the start of the end of the quarter, CEO Tim Cook told analysts Thursday night during the earnings call.

"And of course, on the Apple Intelligence side, we have not rolled out in China," Cook said. "As we just talked about, we did see better results in the markets that we had rolled out in than markets we hadn't rolled out in. And of course, it's the most competitive market in the world."

Cook also cited the national subsidies announced by the government on Jan. 20 that covers its products from the iPhone to iPad, Mac and smartwatches up to a certain price point.

Shares jumped 4% when the market opened Friday, touching an intra-day high of $247.19 as the company's outlook overshadowed the initial concerns over weaker-than-expected iPhone sales for the December quarter. Shares later gave back those gains and traded down 0.7% as the stock market dipped.

The initial share rally came around the time when bullish trades worth millions of dollars were posted early Friday. The largest of the block trades posted so far was at 9:42:36 a.m. in New York, when an active buyer was recorded to have paid a $4.69 million premium for call options that give the holder the right to buy 116,000 Apple shares at $220 each by Dec. 19.

More than 961,350 call options were traded so far, surpassing the 20-day average of 599,393, according to data compiled by Bloomberg. Including put options, total volume reached 1.54 million contracts, landing Apple in the third spot among the most active stock options, just behind $NVIDIA (NVDA.US)$ and $Tesla (TSLA.US)$.

(To see Apple's options chain, click here. For the options ranking led by Nvidia and Tesla, click here.)

Share your thoughts on Apple. Do you expect gains to continue? Can the sales in China finally accelerate? Is Apple Intelligence enough to spur a massive upgrade cycle for iPhone? Let your voice be heard by voting below.

Can Apple sustain its gains?

Yes

73%

27%

63 votes

Vote has ended

Options trading entails significant risk and is not appropriate for all customers. It is important that investors read Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount. Supporting documentation for any claims, if applicable, will be furnished upon request. Moomoo does not guarantee favorable investment outcomes. The past performance of a security or financial product does not guarantee future results or returns. Customers should consider their investment objectives and risks carefully before investing in options. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. All company analysis information is provided by third parties and not by Moomoo Financial Inc. Any illustrations, scenarios, or specific securities referenced herein are strictly for informational purposes and is not a recommendation. Past investment performance does not guarantee future results. Investing involves risk and the potential to lose principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.

Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only. Read more

+15