Today’s tickers: AAPL, INTC, MSFT, ROH, WFC & WFT
AAPL – Apple Inc. – Volume at the January 80 and 85 strike puts in Apple Inc. quickly surged to around 10,000 lots each as investors recycled a story appearing at a tech-website that the health of Apple’s CEO and gadget-wizard, Steve Jobs was “declining rapidly.” Apple options are generally extremely liquid throughout the day and investors generally have plenty of product or strategic fodder to react to as they deal actively in and out of option contracts. The January 80 strike puts had traded in a narrow 1.63-2.05 range until around 12:30 ET before the story began circulating. Investors pounced on put contracts giving investors rights to sell shares and helped pushed put prices as high as 3.10. The January 85 strike puts also jumped from a 3.07-3.72 intraday range to as high as 5.05 as volume jumped. Investors fear that Apple will lose some of its appeal without Jobs at the helm. Recently speculation centers on Jobs’s withdrawal from January’s MacWorld annual conference in San Francisco. Traders marked option implied volatility 5% higher as a result of the trading.
INTC – Intel Corp. – Investors looked to tech as a possible bright spot in early 2009 sending several bellwether computer-related stocks higher. Among them shares of Intel gained 3.5% to $14.63 while option activity confirmed a bullish stance. Around 40,000 option contracts changed hands by lunchtime with investors exchanging call and put contracts with an even bias. However, the direction of the trading was of more interest. For example, volume of 7,390 lots in the January 12.5 strike puts was largely instigated by one investor selling premium for just 18 cents. If this is a naked position the investor needs to see Intel shares remain above $12.32 at expiration. On the call side the 14, 15 and 16 strikes were active with the 15 strike receiving most attention on volume of 8,640 contracts where investors paid average premiums of 51 cents. Some investors spread their bull positions by selling the higher 16 strike producing a call spread costing 31 cents. A maximum profit of 69 cents per contract would result if shares reached or exceeded the upper strike price at expiration.
MSFT – Microsoft Corp. – We can’t observe the same bullish pattern in Microsoft despite the fact that its shares are 2.3% higher at $19.41 this morning. A put/call ratio of 1.35 indicates…
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