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Apple Options Market Signals Investors Divided Over iPhone 16's Sales Outlook

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Luzi Ann Santos wrote a column · Oct 21 11:50
$Apple (AAPL.US)$ options market signals investors and speculators are divided over whether iPhone 16 could spark a massive upgrade cycle that may accelerate the company's revenue growth.
Unusual activities in the Apple stock options market showed three bearish positions and two bullish ones just before noon in New York Monday. The bearish trades were posted even as the stock headed for a closing record high.
The biggest of those trades was for a $4.03 million premium paid on call options that give the holders the right to buy the stock at $225 by the end of this week. That strike price is more than $10 below the current stock price.
Apple Options Market Signals Investors Divided Over iPhone 16's Sales Outlook
(To see Apple's options chain, click here. For the US options market, click here.)
The bearish trades were posted even after the latest JPMorgan analyst note signalled improving demand for iPhone 16. The average lead times for the latest iPhone model is now in line with iPhone 15, after tracking below the previous model in the first five weeks, analysts at JPMorgan said in a note to clients dated Oct. 20. Higher lead times signal stronger demand, with buyers having to wait longer to get their hands on the latest iPhone model.
The JPMorgan report came days after Counterpoint Research data showed that sales of the newest iPhones in China surged 20% in their first three weeks, compared with the previous model. IPhone 16, which was launched in September, has outperformed the 2023 model in the Asian nation so far, Bloomberg reported, citing Counterpoint.
Apple Options Market Signals Investors Divided Over iPhone 16's Sales Outlook
Capital trend data tracked by moomoo is showing the bulls could be taking a pause as Apple shares head for a record closing high. Outflows from the stock outpaced inflows by $38.8 million, adding to the stock's second straight monthly outflow.
Technical indicators are also leaning negative, with eight of the 15 gauges tracked by moomoo signaling that Apple shares could be overbought, and the trend may be turning bearish.
Apple Options Market Signals Investors Divided Over iPhone 16's Sales Outlook
As of 12:24 p.m. in New York, call options that give the holders the right to buy Apple shares at $237.50 by the end of the week attracted the heaviest trading. The contract is moving closer to being in-the-money, with the stock now trading at less than a dollar below that strike price. Volume of 34,650 is now triple the open interest.
While Wedbush see signs that Apple could see a "historical" upgrade cycle for iPhones, setting the stage of a supercycle, Bloomberg Intelligence analysts are less optimistic.
Apple Options Market Signals Investors Divided Over iPhone 16's Sales Outlook


"Our outlook remains tempered because the launch date of Apple Intelligence in China isn't firm," Bloomberg Intelligence analysts wrote in a note Oct. 18.
Share your thoughts on Apple in the comments section. Do you see a supercycle for iPhone upgrades coming this year? And if you have a share price forecast, please vote below.
 

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.
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Luzi Ann Santos
Moomoo Senior News and Community Manager
Former editor at Bloomberg, ex-commentary editor at Lazard. Posts aren’t investment advice. Views are just mine.
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