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Oct. 28, 2021, 2:56 p.m. EDT

Apple stock option traders prepared for a more muted post-earnings reaction than usual

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By Tomi Kilgore

Shares of Apple Inc. /zigman2/quotes/202934861/composite AAPL +2.78% jumped 2.5% toward a 7-week high, ahead of the technology behemoth's fiscal fourth-quarter report due out after the close, even as options traders are prepared for a more muted than usual stock reaction to the report. An options strategy knows as a straddle, a pure volatility play that involves the simultaneous buying of bullish and bearish options with at-the-month strikes expiring Friday, is implying a one-day, post-earnings stock price move of $4.16 in either direction, according to data provided by Option Research & Technology Services (ORATS). That expected move is 28.5% less than the average one-day post-earnings move over the past 12 quarters of $5.82 in either direction, according to ORATS Principal Matt Amberson. At current prices, that means the stock would have to close below $148.41 or above $156.73 for straddle buyers to make money. The stock, which is trading 2.6% below the Sept. 7 record close of $156.69, has gained 15.0% year to date, while the tech-heavy Nasdaq 100 /zigman2/quotes/210598364/realtime NDX +2.99% has rallied 22.2% and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.49% has advanced 16.5%.

/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 169.91
+4.59 +2.78%
Volume: 76.73M
Dec. 7, 2021 2:28p
P/E Ratio
30.33
Dividend Yield
0.52%
Market Cap
$2712.31 billion
Rev. per Employee
$2.38M
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/zigman2/quotes/210598364/realtime
US : U.S.: Nasdaq
16,320.68
+474.52 +2.99%
Volume: 563,729
Dec. 7, 2021 2:28p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
35,751.41
+524.38 +1.49%
Volume: 305.56M
Dec. 7, 2021 2:28p
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