Traders Switching to Apple (AAPL) Options

12/30/2009 12:01 am EST


Apple (AAPL) is having another positive week so far. Contributing to the positive move is research from Broadpoint AmTech, raising its price target to $260 for 2010. Prices above $210 are not just 52-week highs, they are all-time highs.

But what has been seen more and more of late is that the Apple speculators are trading more and more options to get exposure to the share price, rather than buying or selling the shares outright.

This can be seen because all of the activity is in the front-month contract, which is generally indicative of retail and active traders looking for exposure, rather than making long-term bets on the share price.

The options trading is through the roof already for AAPL January calls, listed below with contract volume and open interest:

The "old-new" 52-week trading range was $78.20 to $209.35 after Thursday's close was at $209.04. At 10:30 am ET, Apple had traded right at seven million shares and the stock was now above $212.

When you tally up the options volume that is the fully leveraged equivalent of more than four million shares from the 40,000 contracts traded and the open interest of more than 270,000 contracts in these strike prices alone, it is representative of over 27 million shares on a fully leveraged basis.

Click to Enlarge

Stock traders who are making trades around the price of Apple's near-term moves might have to keep an eye on the options trading more than the stock trading.

By Jon Ogg of

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