“Apple Inc. (AAPL), whose share swings are contributing to one of the worst bouts of U.S. stock volatility this year, is becoming a focus of bears in the options market,” Joseph Ciolli and Callie Bost report for Bloomberg.
“Demand for contracts that appreciate as Apple drops are selling at the highest prices in 14 months relative to bullish ones, data compiled by Bloomberg show,” Ciolli and Bost report. “The stock has moved an average of 1.2 percent a day since the start of September, up from 0.9 percent in the first eight months of 2014, as concern mounted that features of its new phone are flawed.”
“Small changes in Apple have big implications for investor sentiment because of the company’s market value, the largest in the world. A 1 percent decline in the stock erases almost $6 billion of equity capitalization and lops about 5 points off the Nasdaq 100 Index. Its fit in the last four weeks has coincided with a 14 percent increase in S&P 500 volatility,” Ciolli and Bost report. “‘Volatility is creeping back into the market,’ Steve Sosnick, equity risk manager at Timber Hill LLC, the market-making unit of Greenwich, Connecticut-based Interactive Brokers Group Inc., said in a Sept. 30 phone interview. ‘It’s no surprise that people would want to hedge profits on such a huge company that’s had great returns this year. They’re more fearful than greedy.'”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]