Thursday’s Vital Data: Apple Inc. (AAPL), McDonald’s Corporation (MCD) and Tesla Motors Inc (TSLA)

The major market indices traded flat on Wednesday, with the Dow Jones Industrial Average and the S&P 500 bouncing around breakeven for the session as Wall Street continues to digest the flood of corporate earnings reports. Options traders appeared to remain hopeful, however, as the CBOE’s put/call volume ratio dipped to a one week low of 0.57. The 10-day moving average held at 0.62.

Apple Inc. (NASDAQ:AAPL) lead the speculation in the options pits ahead of Monday’s quarterly earnings report, even as the rumor mill spread hints at new Macs and features for the iPhone 7.  Meanwhile, McDonald’s Corporation (NYSE:MCD) saw heavy call activity despite offering up middling first-quarter earnings results.

Finally, Tesla Motors Inc (NASDAQ:TSLA) shares jumped on news of two new lithium-ion batteries — one for homes and the other for large installations.

Let’s take a look at the important information coming out of each.

04-23-2015 Top Ten Options

Apple Inc. (AAPL)

Apple options continued to dominate the options landscape on Wednesday, with volume arriving at 651,338 contracts. Overall, 65% of yesterday’s activity crossed on the call side, with traders focusing heavily on the weekly April 24 series $127 through $131 strikes — each of which currently sport open interest in excess of 21,000 contracts. Peak April call open interest resides at the out-of-the-money 130 strike, totaling 39,398 contracts.

By the numbers, Wall Street is looking for a profit of $2.17 per share out of Apple, though places the whisper number at $2.31 per share. Speculation has ramped up in recent weeks, with rumors floating that Apple may offer an updated line of Macs sooner than expected, while speculation is swirling that the new iPhone 7 will offer features such as digital crown, force touch, and a redefined HD retina display.

McDonald’s Corporation (MCD)

MCD stock is seeing little love from investors after the company posted first-quarter results that lagged behind Wall Street’s targets. For the record, earnings fell to 84 cents per share from $1.21 per share in the year-ago period. Wall Street was expecting a profit of $1.06 per share.  Revenue arrived in-line at $5.96 billion, but same store sales fell a worse-than-expected 2.6% year-over-year.

Ahead of the report, options traders were call happy on MCD stock. Volume came in at 189,903 contracts, with 68% of this activity trading on the call side. Despite this call activity, puts were the investment vehicle of choice among weekly April 24 series traders, with peak open interest totaling 9,501 contracts at the $94 put strike. The April $93 put and $95 put were also active, with 2,109 contracts and 3,711 contracts in open interest, respectively.

With MCD trending lower in pre-market activity, these puts may be smart money.

Tesla Motors Inc. (TSLA)

Tesla Motors stock jumped nearly 5% on Wednesday, after the company said that it will be taking the wraps off of two new lithium ion batteries. While the company’s move into residential and commercial business power solutions has been rumored for a while, Tesla will unveil its new home-based battery supply and larger business-based battery next week, with Wal-Mart Stores, Inc. (NYSE:WMT) and Cargill, Incorporated already on board as retail locations.

Options traders, while optimistic, appeared somewhat cautious on TSLA stock. Volume on the session reached 167,554 contracts, though only 57% of this activity consisted of calls. Looking at May open interest levels, traders are focused on the overhead $220 call strike, which sports open interest of 1,367 contracts, while another 1,020 contracts are open at the in-the-money May $210 call strike.

In premarket trading, TSLA stock is off slightly heading into the open.

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

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