Apple options show $442M bullish bet ahead of earnings

Apple Inc. options traders placed $442 million in bullish bets last week, pushing total premium to $590 million ahead of the company's July 30 earnings report, according to SpotGamma data.

"The options market is pricing in a post-earnings move of roughly 4 percent, well above the historical average of about 1 percent," said Brent Kochuba, founder of options analytics firm SpotGamma. "That's an unusually large implied swing for Apple."

The stock has rallied about 20 percent from its late June low to trade near $321, within $2 of its all-time high. The implied volatility of 29.78 suggests a daily price fluctuation of roughly $6.02, per Cboe LiveVol data. Apple's put/call ratio stood at 0.89 on July 23, above the normal rate of roughly 0.72, indicating elevated hedging activity alongside the bullish positioning.

The most notable single trade was a $2.6 million deep-in-the-money call option at the $280 strike expiring in mid-August, with a delta near 1 — effectively a share replacement strategy. Separately, 5,000 contracts of the $340 weekly call expiring this Friday traded for $2.3 million in total premium, requiring Apple to rise roughly 3.4 percent past its all-time high to turn profitable. At the $320 strike, the largest concentration of open interest, call contracts outnumbered puts by more than 2-to-1.

Apple reports fiscal third-quarter results after Thursday's close. Wall Street expects revenue of $108.6 billion and earnings per share of $1.89, according to LSEG estimates. The report will be Chief Executive Officer Tim Cook's last earnings call before he transitions to executive chairman in September. The company's Services business will receive heightened attention after Apple raised prices on Mac and iPad models, citing soaring memory costs.

The strong options positioning suggests the market views Apple as a potential stabilizer for equities after disappointing reports from Google parent Alphabet Inc. and Tesla Inc. weighed on sentiment. "Apple has a decent chance of helping to steady the market this week," said Nigam Arora, founder of The Arora Report. "Investors see it as a defensive name because it hasn't spent tens of billions on AI infrastructure like some peers." A beat on revenue and guidance could push Apple decisively past its all-time high, while a miss risks amplifying the downside given the elevated implied volatility.

This article is for informational purposes only and does not constitute investment advice.