Traders bet big that Apple is set to rise 36 percent

“Apple bulls appear to be taking to the options market to place long-term bets on the stock,” Alex Rosenberg reports for CNBC.

“Over the past few days, there has been a considerable increase in positions in the Apple 130-strike call option expiring in in January 2018,” Rosenberg reports. “About 10,000 of these contracts have been purchased in the past few sessions, representing positions on some $100 million worth of Apple shares.”

“Those buying these options will see profits on their position if Apple shares rise above roughly $133 by early 2018, which would represent a 36 percent rally for the tech giant,” Rosenberg reports. “‘Up 40 percent in 18 months sounds shocking — until you realize that Apple was trading at that level a year ago. So it’s definitely within striking distance to get to that point,’ Dennis Davitt of Harvest Volatility Management said Tuesday on CNBC’s Trading Nation.”

Read more in the full article here.

MacDailyNews Take: Apple stock’s last 12 months:

AAPL chart


    1. Yes, the above prediction is laughable. Apple is appearing now on the list of most shorted stocks now. Confidence in Apple is DROPPING not rising.

      I’ve been hammered relentlessly with my Apple holdings.

  1. The only thing Apple’s stock buyback accomplished was to provide a window for activist short-term traders to get in and out of AAPL to extract a short-term profit. None of these wolves of wall street are interested in investing in anything long term. The whole purpose or market trading is now a sham, hurting companies and society by putting them under the yoke of short-term results rather than enabling investment in great long-term projects.

    1. The stock buyback did help some short-term traders early on but since then it’s hard to say it’s helped much, looking at Apple’s stock price.

      Despite that, it’s a long-term play which I’m confident will pay off in a big way, for both Apple and its stockholders. Remember every share Apple takes off the market is one less share they need to pay dividends on in the future. So it helps them to buy back shares now.

      Since Apple started buying back shares in 2013, the float has decreased ~17% as of April 2016. At these rates, Apple will easily be at 20% stock taken off the market by this fall (or even sooner if they’ve been aggressive of late given the stock price drops and given Tim Cook’s recent remarks about being opportunistic with buybacks.). If the current rate continued (and the price stayed constant) they’d be at 50% reduction by 2021.

      I don’t know where the breaking point is, but given the relentless rate of buybacks, at some point we’ve got to hit a point where the remaining stockholders aren’t easily spooked by cheap scare tactics. At that point, there’s going to be a steep rise in stock price as there’s no longer and easy source of available shares.

      As long as Apple continues to generate obscene profits and direct that back into buybacks, it’s simply a matter of time.

      Apple is draining the ocean. Those betting on the stock to drop might be right short term, but they are swimming against the tide in the long term

  2. Trading volume in any particular option says nothing about sentiment. Positions (bearish, neutral, or bullish) are constructed from combinations of these options.

  3. What is clearly evident after reading the comments above is just about all of you should stick to tech issue because you don;t squat about financial issues, investing, trading, options, hedging and managing a short position or the various strategies, other than believing a precipitous price drop is about occur, that utilize short positions.

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