Friday, December 28, 2012

Options Traders Pile On After Apple Decline

dapd

Options traders piled on to the selloff in Apple Inc. on Wednesday morning, and trading indicates they see more big swings ahead.

The open positions in Apple options were more bearish than usual Wednesday, and a closely watched indicator of the options market’s outlook for sharp moves in the shares jumped by more than 15%.

Options trading indicates investors think this morning’s violent move could be repeated. Implied volatility in Apple shares, which reflects expectations for future stock moves, jumped more than 15%. That shows investors think the stock will see bigger swings over the next month–and it also boosted the price of options contracts. Implied volatility is a key element of options pricing.

No comments:

Post a Comment