Unusual Options Activity in Apple $AAPL

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Unusual Options Activity In Apple AAPL
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• Hi, My name is Steve and Im with Options Trading
  Research, today were reviewing our recently
  published article

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• Unusual Options Activity In Apple AAPL

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• As many of you know, unusual options activity can
  be a valuable indicator as to what traders are
  thinking, and more importantly, where these
  stocks are heading in the short-term.

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• This is something professional options traders
  pay a lot of attention to, and for good reason
  Unusual options activity can tip off big moves
  in a stock, either up or down.

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• So lets take a look at some interesting
  activity that caught our eye this week Apple
  AAPL is the largest company in the world, with a
  market cap of over 650 billion.

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• The company is known for its innovative tech
  products, most notably the iPhone. For a good
  description of the company, follow the link.

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• AAPL is trading at 114.86 up 6 for the year.
  Thats 14 below the 52-week high, and 25 above
  the 52-week low.

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• So what does unusual options activity in AAPL
  tell us?

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• Apple is one of the most heavily traded stocks in
  the world, with an average volume of nearly 60
  million shares traded per day. With earnings
  coming out Tuesday after close, you can bet
  theres going to be even more action than usual.

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• Despite being the largest company in the world,
  and having some of the most innovative products
  on the market, AAPL shares are actually
  undervalued.

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• Even with really solid earnings news, investors
  often have ridiculously high expectations for
  quarterly results. Heres the deal

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• This week, a major call spread traded in AAPL
  options. Keep in mind, a call option makes money
  when the underlying stock goes up before its
  expiration date.

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• A long call spread is when a call at a higher
  strike is sold against a long call in order to
  reduce cost. To be more specific, a trader
  purchased 40,000 November 124-125 call spreads
  for 0.20 per spread (long 124, short 125).

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• Thats a total cash outlay of 800,000 with max
  gain of 3.2 million. Max profits would be
  reached at 125 by November expiration, or about
  8.5 above the current price.
• Heres the chart of AAPL

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• Apple shares spiked above the 50-day moving
  average just recently, as you can see in the
  chart. The jump was likely caused by the
  excellent tech earnings that came out during the
  week.

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• It seems investors are also expecting positive
  results from AAPL, although the share price has
  pulled back a bit since the initial jump.

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• This call spread suggests AAPL could see a
  relatively large spike in the price after
  earnings at least before mid November.

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• Keep in mind, a roughly 10 move in the stock is
  not at all unusual based on past post-earnings
  performance. The spread itself is interesting
  because its only a 1 wide. Its basically
  similar to buying an OTM call at a discount.

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• The trader is capping profits at 125, but is
  getting a significant discount to do so. Not
  coincidentally, there also seems to be a fair
  amount of resistance around the 125 level.

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• More Options Trading Ideas

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• Keep in mind, theres a lot more unusual options
  activity going on than what we discuss here. We
  just try to bring you what we feel are the most
  significant ones and the ones you might actually
  be able to make some money on!

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