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Friday’s Vital Data: Apple Inc. (AAPL), General Electric Company (GE) and United Continental Holdings Inc (UAL)

Options activity provides a look at expectations on AAPL, GE and UAL

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U.S. stock futures are trading broadly higher this morning, as Wall Street gained confidence in the potential for tax reform. Senate Republicans narrowly passed a budget blueprint for the next fiscal year, which Wall Street believes will pave the way for the Donald Trump tax reform package.

Friday’s Vital Data: Apple Inc. (AAPL), General Electric Company (GE) and United Continental Holdings Inc (UAL)

Regardless of what you think about the Trump tax plan, investors appear happy with this development. Specifically, futures on the Dow Jones Industrial Average are up 0.38%, S&P 500 futures have added 0.26% and Nasdaq-100 futures have gained 0.23%.

On the options front, volume hit near-term highs on Thursday, with about 19.9 million calls and 16.6 million puts changing hands on the session. On the CBOE, the single-session equity put/call volume ratio slipped to 0.70, while the 10-day moving average held at a two-month high of 0.67.

As you can see from the chart below, Thursday’s options activity remained elevated across the board. Apple Inc. (NASDAQ:AAPL) got off light, with volume hitting 171% of its daily average following news that the Apple Watch lost cell service in China. Meanwhile, General Electric Company (NYSE:GE) saw volume soar to nearly five times the norm ahead of this morning’s disappointing quarterly report. Finally, United Continental Holdings Inc (NYSE:UAL) sparked a firestorm of activity after the company held a disastrous post-earnings conference call.

Friday’s Vital Options Data: Apple Inc (AAPL), General Electric Company (GE) and United Continental Holdings Inc (UAL)

Apple Inc. (AAPL)

AAPL stock was hit with a double whammy yesterday. Not only did the shares lose ground amid a broad selloff in technology stocks, but the Apple also took a hit from news out of China.

It seems the Apple Watch’s cellular service was abruptly cut off in China, with no explanation. The news is not good for Apple, which continues to struggle with lower-cost options in China — a key consumer market for the company.

Options traders, however, appeared to look beyond China and possibly toward next month’s earnings report. Volume rose to over 730,000 contracts, with calls making up an above average 63% of the day’s activity. That said, there is still some lingering pessimism heading into Apple’s report.

Specifically, the weekly Nov 3 put/call open interest ratio has risen to a near-term high of 0.73. A rising put/call OI ratio indicates that puts are being added at a faster rate than calls, potentially signaling a shift in sentiment as Apple’s earnings draw near.

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