Are Apple Stock Options Getting Too Active? (AAPL)

Apple Inc. (NASDAQ: AAPL) is often accused of making its shares inaccessible with such a high share price.  It has not prevented its stock from running up, but the daytrading crew that trades lower-priced stocks is resorting to trading options now rather than just buying 10 shares.  When you see this at work, usually it is around earnings or a key event.  Now it is just around CALL OPTIONS trading as ‘buying the stock on the cheap.’

After looking at the CBOE mid-day volume leader board per contract (see table below), eight of the top ten options volume contracts were “AAPL” and that is not a usual event.  More importantly, they were all in March 2012 expirations.  Of the PUT option series, seven of the ten most active option contracts were AAPL.

After tallying these all up, some 65,000 options contracts had traded in the March series alone of the CALLS.  That is almost 6.5 million shares worth of leverage.  We had seem about 50,000 of the PUTS in there, worth another 5 million shares on a fully leveraged basis.

It is not unusual to see heavily traded and widely followed stocks have increased options trading.  After all, it offers the most leverage or the ‘bang for the buck.’  Still, 8 of the 10 most active CALLS and 7 of the 10 most active PUTS… That is not normal.

We asked earlier… IS APPLE CLOSE TO FULL VALUATION?