Wednesday’s Vital Data: Apple Inc. (AAPL), Netflix, Inc. (NFLX) and Pfizer Inc. (PFE)

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A rebound in oil prices and a slight recovery in Chinese markets weren’t enough to offset broad-market selling on Tuesday. Dow Jones Industrial Average component Apple Inc. (NASDAQ:AAPL) led the way into the red with a loss or more than 3% — and if the technicals play out, more losses could be on the way. On the day, both the Dow and the S&P 500 shed about 0.2%.

Puts continue to grow in popularity as earnings season starts to wind down. Corporate earnings have largely been a disappointment to investors, and options traders appear to be hedging their bets. Overall, the CBOE’s single-session equity put/call volume ratio rose to a one-week high of 0.75, while the 10-day moving average rose to 0.69 — also a one-week high.

In equity news, AAPL’s technical troubles drew record short-term volume on Tuesday, with more than 2 million contracts changing hands. Elsewhere, Netflix, Inc. (NASDAQ:NFLX) stock soared to a fresh all-time following a “buy” initiation at Guggenheim.  Finally, Pfizer Inc. (NYSE:PFE) is trading ex-dividend today, driving a flood of call volume for dividend capture plays. Pfizer also received EU approval for its nearly $16 billion buyout of Hospira, Inc. (NYSE:HSP).

Wednesday’s Vital Data: Apple Inc. (AAPL), Netflix, Inc. (NFLX) and Pfizer Inc. (PFE)

Apple Inc. (AAPL)

AAPL stock has been the topic of speculation for the past month, ever since Apple’s iPhone 6 second-quarter sales figures disappointed analysts and investors alike. Speculation of plunging Apple Watch sales have also weighed heavily on sentiment. Currently, the stock is down more than 10% from its April peak, and AAPL’s breach of key technical support levels (AAPL’s 50-day moving average and the $120 level) this week may be an indicator of additional losses to come.

Options traders are not taking the recent plunge lightly. Volume has ramped up to record short-term levels, with about 2.1 million contracts changing hands on Tuesday. Furthermore, calls are losing their influence over the stock, accounting for just 55% of yesterday’s total volume. AAPL call options typically make up about 60%-65% of activity on an average day.

Looking at weekly Aug 8 series open interest for AAPL, peak OI totals 26,530 contracts at the overhead $122 strike, with another 23,083 contracts at the now out-of-the-money $120 strike. Peak put OI, meanwhile, numbers 24,233 contracts at the out-of-the-money 105 strike.

Netflix, Inc. (NFLX)

Netflix stock surged to a new all-time high of $122.79 on Tuesday after analysts at Guggenheim initiated coverage on NFLX with a “buy” rating and a $160 price target. NFLX is now up nearly 150% year-to-date, with the stock’s most recent surge driven by a blowout second-quarter earnings report.

Option volume continues to swell on NFLX, with 445,169 contracts changing hands on Tuesday. Calls were the reluctant leader on the day, accounting for only about 54% of the total volume. A look at weekly Aug 8 series OI reveals that peak OI totals 5,837 contracts at the $115 put strike, with peak call OI numbering 4,438 contracts at the in-the-money $120 strike.

Pfizer Inc. (PFE)

PFE stock made a rare appearance on the most active options listing on Tuesday. Most of the activity was likely centered on the stock trading ex-dividend today. Stockholders of record as of the close last night are eligible for a quarterly dividend of 28 cents per share to be paid on Sept. 2.

In other PFE news, Pfizer’s pending $15.23 billion acquisition of Hospira has received approval from the European Commission. The approval is conditional on Pfizer divesting certain drugs.

On the options front, 392,950 contracts traded on PFE. Given that 96% of the day’s volume was comprised of call contracts, and that PFE trades ex-dividend today, it’s a safe bet that most of this activity was related to dividend capture strategies.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/08/wednesdays-vital-data-apple-inc-aapl-netflix-inc-nflx-pfizer-inc-pfe-options/.

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