“For options trader Tim Biggam, yesterday was the day he was waiting for in shares of Apple Inc,” Callie Bost reports for Bloomberg. “The iPhone maker’s minute-long swoon starting 20 minutes after trading began contributed to the biggest jump in the Chicago Board Options Exchanges Apple Volatility Index in two years. The stock plunged almost 5 percent during one 60-second stretch and at its lowest point was down 6.4 percent from the previous close, the largest retreat since January.”
“Prices on bearish Apple contracts soared as much as 400 percent, a rare payday for traders who have added to such positions in the options over the past month. Before yesterday, Apple had rallied 48 percent in 2014 and was up 24 percent since global equity markets bottomed in mid-October,” Bost reports. “‘I was very happy to have a day like today,’ Biggam, chief options strategist at TradingBlock, a brokerage firm at CBOE, said by phone yesterday. ‘In a stock that goes up every day, when everyone’s on the wrong side of the boat, it falls a lot quicker.'”
Bost reports, “‘When things get stretched in one direction, taking a counter-trend position is a great use of options strategies,’ Biggam said. ‘I happened to get lucky and catch it bigger than I thought.’ Steve Dowling, a spokesperson for Apple, declined to comment on the options trading.”
Read more in the full article here.
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