With a big move for Apple shares expected after the bell, options traders appear to be bracing themselves.
The Tuesday earnings report is expected to send Apple shares up or down by 6 percent, based on a look at options prices. (That is, 6 percent of the stock price is the amount one would have to pay in order to get exposure to a potential rise and a potential fall in Apple this week.)
As the big moment approaches, traders appear to be taking to the option market to get some cheap protection. Among all equity options, the most popular single options strike on Tuesday morning was the Apple 90-strike put expiring at the end of Friday's session, which technically represents the right to sell Apple shares for $90.
A particularly large trade was seen just after the open, when a trader appeared to buy 11,497 contracts of those near-term downside puts for 51 cents each. Since each contract represents 100 shares, this is a more than half-million-dollar bet that Apple slides some 10 percent in just a few days.