The slide in Apple Inc.’s shares has taken some $200 billion off the technology giant’s market cap, boosting demand for options to protect against further declines. Still, for some bargain hunters, it’s an opportunity to place some suddenly cheaper bullish bets.
(Bloomberg) — The slide in Apple Inc.’s shares has taken some $200 billion off the technology giant’s market cap, boosting demand for options to protect against further declines. Still, for some bargain hunters, it’s an opportunity to place some suddenly cheaper bullish bets.
Call options — which gain in value from a share rally — are rising along with bearish put options in early trading Thursday, despite the stock dropping as much as 5.1%. Shares extended a decline from Wednesday as China plans to expand a ban on the use of iPhones to government-backed agencies and state companies.
Read more: China Seeks to Broaden iPhone Ban to State Firms, Agencies (3)
Bullish investors may be eyeing the tech company’s Wonderlust event, scheduled for Sept. 12, where Apple is expected to unveil product upgrades on a host of its popular gadgets. They may be bidding up calls, expecting share price gains going into the event, according to Stephen Solaka, managing partner at Belmont Capital Group.
“People are trying to potentially buy the dip,” Solaka said, adding that the drop in share prices, down some 7% since Friday’s close, might also be fueling fervor for big tech exposure.
Read more: Apple Selloff Deepens to $212 Billion on China iPhone Curbs
The most actively traded option Thursday was the $180 call expiring Friday, which would profit from a rebound above that level. Implied volatility — used by traders to measure value — for one-month options was up about 3 percentage points as of 10 a.m. in New York, with puts up slightly more than calls but within the recent range, with volume evenly split.
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