Tuesday’s Vital Data: Apple Inc. (AAPL), Alibaba Group Holding Ltd (BABA) and Chesapeake Energy Corporation (CHK)

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The major market indices remained in a holding pattern on Monday, as Wall Street appeared unwilling to make any major moves ahead of Thursday’s Federal Reserve decision on interest rates. Weakness in China and another drop in crude oil prices tipped the balance in favor of the bears yesterday, sending the S&P 500 down 0.41% and the Dow Jones Industrial Average lower by 0.38%.

Even options traders appeared to have had their fill of speculation.

Volume dropped to anemic levels on Monday, with protective puts taking the lead in what little activity was left. Overall, the CBOE’s single-session equity put/call volume ratio rallied for a fourth day in a row, closing at a three week high of 0.91. The 10-day moving average, meanwhile, rose to a one-week high of 0.76.

Turning to equity options news, Apple Inc. (NASDAQ:AAPL) said pre-orders for the latest iPhone editions are set to exceed last year’s first-weekend sales. Elsewhere, Alibaba Group Holding Ltd (NYSE:BABA) shares were smacked lower following a bearish Barron’s article, and Chesapeake Energy Corporation (NYSE:CHK) rallied sharply despite a price-target cut at Citigroup.

09-15-2015 Top Ten Options

Apple Inc. (AAPL)

AAPL stock bucked the downtrend on Monday, as the shares rallied nearly 1% on preliminary iPhone 6s sales data. According to Apple, pre-orders for the new iPhone 6s and 6s Plus are on pace to exceed last year’s first-weekend sales of 10 million units. Despite the strong data, AAPL stock remained capped by its 50-day moving average — a trendline that shares have not closed a session above since July 21.

As for Apple options, volume was particularly below average for the equity. Only 687,771 contracts traded on AAPL stock on Monday, with calls claiming about 58% of the day’s take. Looking at the soon-to-expire September series, the $115 and $120 strikes should be closely watched heading into Friday’s expiration.

Currently, the $115 strike sports put and call open interest of 59,127 contracts and 66,317 contracts, respectively. Meanwhile, both peak put and call OI reside at the out-of-the-money $120 strike, with 118,184 call contracts and 75,039 put contracts open here.

Alibaba Group Holding Ltd (BABA)

BABA stock was among the hardest hit in Monday’s pullback, with the shares shedding more than 3% on the day. Bearish sentiment spiked on BABA on Monday, after an article in Barron’s suggested that the stock could shed as much as 50% of its current value. BABA stock has already shed more than 32% since late May, with the shares struggling to overcome resistance at their 10-day moving average for the better part of the past month.

As with AAPL, Alibaba options volume arrived well below par. Only 157,618 contracts changed hand on BABA stock, with puts arriving as the most popular, snapping up 54% of the take following the bearish article.  

Turning to the September series, a showdown could be brewing at the $65 level for BABA, as this strike is home to peak put OI of 10,222 contracts. Additionally, some 6,555 call contracts are also open at the Sep $65 strike, though peak call OI for the series totals 13,810 contracts at the out-of-the-money $70 strike.

Chesapeake Energy Corporation (CHK)

CHK stock was among the few big winners on Monday. The shares surged more than 4.6% higher on the day, despite a neutral-to-bearish update from brokerage firm Citigroup. Specifically, Citi reiterated its “neutral” rating on CHK while lowering its price target from $13.50 to $9 per share.  

Puts remained quite popular on the oil and natural gas concern. Overall volume rose to a near-term peak of 257,556 contracts, with puts commanding 89% of Monday’s activity.  For the September series, heavy put accumulations are currently open at the $6, $7, and $8 strikes, with peak OI totaling 72,345 contracts at the latter. Peak call OI, meanwhile, totals just 20,606 contracts at the overhead $8 strike.

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/2015/09/tuesdays-vital-data-apple-inc-aapl-alibaba-group-holding-ltd-baba-chesapeake-energy-corporation-chk-options/.

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