Options traders are betting on Apple (NASDAQ: AAPL) stock gains ahead of the company's earnings announcement on the 30th, according to CNBC on the 27th (local time). The bullish positioning comes as artificial intelligence investment concerns put Big Tech companies under scrutiny, with investors viewing Apple as a defensive play. Call options accounted for $442 million of the $590 million in total option premiums traded for contracts expiring on the 31st, according to SpotGamma data, signaling stronger conviction in upside moves than downside protection.
Call Options Dominate Trading Volume Ahead of Earnings
Investors purchased approximately 560,000 call option contracts compared to only 332,000 put option contracts, according to thinkorswim data. The most popular contract by volume on the 24th was the $300 strike put option expiring on the 31st, with 7,500 contracts traded but total premiums of only $374,000, according to SpotGamma. The second most-traded contract was the $340 strike call option, with 5,000 contracts generating $2.3 million in total premiums. This contract traded at $4.25 per share at close, requiring Apple stock to rise 3.4% this week to exceed the all-time high of $335 for buyers to profit.
Option Pricing Implies Larger-Than-Average Post-Earnings Move
Current option prices anticipate approximately a 4% stock move following Apple's earnings release, CNBC reported. This contrasts with the approximately 1% average move observed over the past year following earnings announcements, suggesting traders expect an unusually large reaction. According to Barchart data, the $320 strike price holds the most open interest among options expiring on the 31st, with 13,000 call contracts and 5,000 put contracts outstanding. This indicates investors believe Apple's earnings will not trigger a stock decline below last week's low, even if results do not drive gains.
Analyst Sees Apple as Market Stabilizer Amid AI Spending Concerns
"There's a fairly high probability that Apple will help stabilize the market this week," said Nigam Arora, founder of The Arora Report newsletter. "Investors view Apple as a defensive stock because, unlike many other large technology companies, Apple is not spending hundreds of billions of dollars on AI infrastructure investments," Arora explained. The positioning reflects Apple's differentiated status among Big Tech peers facing scrutiny over capital expenditure levels related to artificial intelligence buildouts.
FAQ
What are options traders betting on ahead of Apple's earnings on the 30th?
Options traders are betting on Apple stock gains, with call options accounting for $442 million of the $590 million in total option premiums traded for contracts expiring on the 31st, according to SpotGamma data reported by CNBC on the 27th (local time). Investors purchased approximately 560,000 call option contracts compared to 332,000 put option contracts, according to thinkorswim data.
Why do investors view Apple as a defensive stock amid Big Tech concerns?
Investors view Apple as a defensive play because the company is not spending hundreds of billions of dollars on AI infrastructure investments like many other large technology companies, according to Nigam Arora, founder of The Arora Report newsletter. This positioning comes as artificial intelligence overinvestment concerns put Big Tech companies under scrutiny.
How large of a stock move do current Apple options prices anticipate after earnings?
Current option prices anticipate approximately a 4% stock move following Apple's earnings release, according to CNBC. This contrasts with the approximately 1% average move observed over the past year following earnings announcements, suggesting traders expect an unusually large reaction to the results.
