Wait Until After Thanksgiving to Get Long Apple?
Don't expect Apple to get above $650 anytime soon, but maybe the stock has some small room to the upside after Turkey Day.
Today, one sizable trade was the sale of of 2,300 November $650 calls for just $1.40 each. Whether it was an opening or a closing trade, the trader is not getting paid much money to take on the risk of being short AAPL above $650, which you are doing when you are short a call. My experience is that you need some strong conviction that the stock is not moving higher anytime soon to make a low-return trade like this.
On the flip side, maybe things get a little rosier for AAPL after Thanksgiving. At least that's what another trader must have thought, given that we saw the purchase of over 4,000 December 610/615 call spreads. To me, this second trade essentially seems to be a binary bet that AAPL closes above $612 by the end of the year.
It sounds like all the excitement about high returns in AAPL are gone. Investors have felt a beat down from the highs the stock made earlier this year. Combine that with a reorganization at the top, and we might not see AAPL become a darling again until we start to hear some post-Christmas numbers.
Brian Stutland is the President of Stutland Equities and a contributor to CNBC's "Options Action."
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