Volume Spike Investor

Apple, Inc.. (NASDAQ: AAPL) is set to be THE news focus on Monday as Worldwide Developers Conference kicks off.  The expectation is for a 3G iPhone, particularly as all iPhones in the U.S. are essentially sold out now and have been so for weeks.

On such a crummy day like today, it is hard to expect even a great hope for a major announcement will make a gain in the stock.  Shares closed down 2% at $185.64 on 34.4 million shares.  This is actually a tad UNDER the normal trading volume in the common stock.  The story in stock options was quite a different one.  If you look at the options volume in the closest JUNE CALL OPTIONS you can see major bets were being made (with a comparison to prior day’s open interest):

JUNE    VOLUME    OP.INT.
$180    16,104    26,518
$185    15,398    22,136
$190    23,384    34,598
$195    16,415    25,159
$200    36,146    44,559
$210    8,047      30,689

So the closest JUNE-2007 CALL OPTIONS had more than 115,000 contracts trade, which is representative of more than 11.5 million shares if you want some scale.  The open interest was offered as well so you could see a rough comparison for what was outstanding before this event.

What is more interesting than anything is that much of this volume came on at the end of the day.  The options were active throughout the day, but only an end of day review showed the shear number of CALLS traded.

Jon Ogg
June 6, 2008