Home / Stocks / Are Options Traders Betting on a Big Move in Apple (AAPL) Stock?

Are Options Traders Betting on a Big Move in Apple (AAPL) Stock?

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Investors in strongApple Inc./strong AAPL need to pay close attention to the stock based on moves in the options market lately. That is because the Mar 15, 2019 $150.00 Call had some of the highest implied volatility of all equity options today.br;brstrongWhat is Implied Volatility?/strongbrbrImplied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.brbrstrongWhat do the Analysts Think?/strongbrbrClearly, options traders are pricing in a big move for Apple shares, but what is the fundamental picture for the company? Currently, Apple is a Zacks Rank #3 (Hold) in the Computer – Mini Computers industry that ranks in the Top 19% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while nine have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from $2.67 per share to $2.38 in that period.brbrGiven the way analysts feel about Apple right now, this huge implied volatility could mean there’s a trade developing. Often times, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.brbrstrongLooking to Trade Options?/strongbr;brEach week, our very own Dave Bartosiak gives his top options trades. Check out his recent live analysis and options trade for the NFLX earnings report completely free. See it here: Bartosiak: Trading Netflix’s (NFLX) Earnings with Options or check out the embedded video below for more details:” data-reactid=”11″>Investors in Apple Inc. AAPL need to pay close attention to the stock based on moves in the options market lately. That is because the Mar 15, 2019 $150.00 Call had some of the highest implied volatility of all equity options today.
 
What is Implied Volatility?

Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It could also mean there is an event coming up soon that may cause a big rally or a huge sell off. However, implied volatility is only one piece of the puzzle when putting together an options trading strategy.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for Apple shares, but what is the fundamental picture for the company? Currently, Apple is a Zacks Rank #3 (Hold) in the Computer – Mini Computers industry that ranks in the Top 19% of our Zacks Industry Rank. Over the last 60 days, one analyst has increased the earnings estimates for the current quarter, while nine have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from $2.67 per share to $2.38 in that period.

Given the way analysts feel about Apple right now, this huge implied volatility could mean there’s a trade developing. Often times, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

Looking to Trade Options?
 
Each week, our very own Dave Bartosiak gives his top options trades. Check out his recent live analysis and options trade for the NFLX earnings report completely free. See it here: Bartosiak: Trading Netflix’s (NFLX) Earnings with Options or check out the embedded video below for more details:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="brWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. a href=https://www.zacks.com/registration/pfp/?ALERT=RPT_7BST_LP194amp;ADID=YAHOO_CONTENT_ZER_ARTCAT_TALE_OF_THE_TAPE_276amp;cid=CS-YAHOO-FT-359420 target=_blank rel=nofollow noopenerClick to get this free report/abr;bra href=https://www.zacks.com/registration/pfp?ALERT=YAHOO_ZERamp;d_alert=ZER_CONFamp;t=AAPLamp;ADID=YAHOO_CONTENT_ZER_ARTCAT_TALE_OF_THE_TAPE_276amp;cid=CS-YAHOO-FT-359420 rel=nofollow noopener target=_blankApple Inc. (AAPL) : Free Stock Analysis Report/abr;bra href=https://www.zacks.com/stock/news/359420/are-optionstradersbetting-on-a-big-move-in-apple-aapl-stock?cid=CS-YAHOO-FT-359420 rel=nofollow noopener target=_blankTo read this article on Zacks.com click here./abr;bra href=https://www.zacks.com/ rel=nofollow noopener target=_blankZacks Investment Research/a” data-reactid=”14″>
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