Traders are back to using stock options in Apple Inc. (NASDAQ: AAPL) for getting exposure to the price moves rather than the stock it seems.Â We ran a snapshot of the options trading versus the stock trading today at 2:00 PM and the data is pretty obvious that there seems to be speculators in the name around the news of better than expected iPad sales.Â Â Much of the gains may also be on follow-on bullish trading from the $310 to $400 analyst call last week.
Using options for high-priced shares is no new event.Â But it is always interesting when you see the fully leveraged amount of options when converted into a share equivalent.Â This is even more interesting when you consider that options buyers are out speculating in contracts with a strike price of $300 and higher in the CALLS.
For the June-2010 Calls around 2:00 PM EST, Appleâs more active contracts in the $230 to $310 strikes in the CALL options was more than 95,000 contracts.Â The PUTS for June had over 47,000 contracts traded.Â On a fully leveraged basis, that is over 9.5 million shares equivalent in the Calls and 4.7 million shares in the Puts.Â Considering taht Apple was right at 20 million shares at 2:00 that is very active options trading.
Go out to July-2010 expirations and the most active calls was nearly 40,000 contracts traded, almost another 4 million shares equivalent on a fully leveraged basis.Â And in July, the activeÂ Call options went all the way out to $310 and $320 strike prices.Â That is obvious that traders and speculators are using leverage for upside exposure in the name at $1.00 to $2.00 per contract rather than paying over $260 per share.
Shares are now up 2.6% at $263.55 on the day.
JON C. OGG