Tuesday’s Vital Data: Apple Inc. (AAPL), Amazon.com Inc. (AMZN) and Facebook Inc. (FB)

What option activity has to say about AAPL, AMZN and FB

U.S. stock futures are trading sharply lower this morning as Wall Street reacts to news that Turkey shot down what appears to be a Russian jet near the border of Syria.

Escalating tensions have so far taken a back seat on Wall Street, but the latest developments appear to have rattled traders heading into the Thanksgiving holiday break. At last check, futures on the Nasdaq Composite were leading the retreat with a loss of 0.46%, with the S&P 500 Index down 0.44%, and Dow Jones Industrial Average off 0.38%.

Option volume showed signs of holiday trading on Monday, with overall activity coming in well below average. Calls remained on top, however, as the CBOE single-session equity put/call volume ratio dropped to a one-month low of 0.60, driving the 10-day moving average lower to 0.75.

On the equity options front, Apple Inc. (NASDAQ:AAPL) caught headlines and option trader attention on Monday after reports surfaced that the company is looking to launch Apple Pay in China as early as February. Elsewhere, Amazon.com Inc. (NASDAQ:AMZN) has caught the eyes of call traders ahead of the biggest shopping day of the year, while Facebook Inc. (NASDAQ:FB) options traders are holding firm on calls despite looming technical resistance.

11-24-2015 Top Ten Options

Apple Inc. (AAPL)

Apple regained its perch atop the daily most active options listing on Monday, as traders reacted to news that the company is planning on launching Apple Pay in China in early February. Apple has already struck deals with China’s four largest banks, and is preparing to enter an already highly competitive Chinese market. However, Apple still faces regulatory hurdles that could delay Apple Pay’s launch.

Option volume arrived below average for AAPL on Monday, as options traders began to trickle out of the trading pits ahead of the Thanksgiving holiday. Still, more than 465,000 contracts changed hands on AAPL yesterday, with calls accounting for 64% of the day’s take.

The weekly November 27 series $120 strike remains a hotbed of activity for short-term options traders. Currently, some 29,533 call contracts reside at this weekly strike. On the put side, traders have zeroed in on the $116 strike, where 10,744 contracts currently reside. With yesterday’s 1.3% decline and AAPL trading 0.5% lower in premarket activity, the shares could be in for a test of short-term support near $116 given the market’s overall turn lower this week.

Amazon.com Inc. (AMZN)

Black Friday is upon us once again, and options traders for retailing giant Amazon are gearing up ahead of the event. AMZN saw above-average volume on Monday, as 118,152 contracts changed hands on the session. What’s more, calls appear to be favored among AMZN traders, accounting for 56% of yesterday’s total volume.

Taking a closer look at weekly November 27 series options, peak open interest for the series lies at the $680 strike, where 3,989 contracts are currently open.  Furthermore, another 3,218 call contracts are open at the in-the-money $670 strike. By comparison, peak put OI totals just 1,971 contracts at the out-of-the-money $670 strike, with another 1,904 contracts at the deep-out-of-the-money $650 strike.

Facebook Inc. (FB)

FB stock has had a good year so far, but shares have run into a spot of heavy technical resistance in the past month. FB stock was rejected at $110 earlier this month, with $100 providing support following the decline. Now, however, resistance appears to be firming in the $107 to $108 region, creating a bit of concern for technical traders, as FB gets squeezed into its 10-day and 20-day moving averages.

Options traders appear to be taking these developments in stride. Call volume remains high for FB, with these typically bullish bets accounting for 69% of yesterday’s 196,484 contracts in total volume. For the week, traders are centered on the November 27 series $110 strike, with OI totaling 13,932 call contracts. Additional heavy call OI is located at the $108 and $107 strikes, which sport more than 8,000 contracts each.

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

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2015/11/tuesdays-vital-data-apple-inc-aapl-amazon-com-inc-amzn-facebook-inc-fb/.

©2020 InvestorPlace Media, LLC