U.S. stock volatility blamed on Apple bears in options market

Posted:
in AAPL Investors edited October 2014
Increasing volatility in the U.S. stock market is being attributed in part to Apple bears on the options market, who have helped to keep America's largest publicly traded company at around the $100-per-share level.


The New York Stock Exchange, credit Carlos Delgado via Wikipedia.


Data compiled by Bloomberg reveals that demand for contracts that appreciate as shares of Apple fall are at their highest prices in 14 months, when compared to bullish options. Reporters Joseph Ciolli and Callie Bost noted that Apple's sheer size means that a 1 percent decline in its stock can cut about 5 points from the Nasdaq 100 Index.

As shares of Apple have fluctuated around the $100 mark for the last month, volatility in the S&P 500 has increased by 14 percent. Two days alone in September were particularly significant --?shares of AAPL dropped 4.2 percent on Sept. 3, and lost 3.8 percent on Sept. 25.

As of Friday morning, shares of Apple continue to trade below the $100 mark, off from a high of $102.64 on Sept. 23. But the company's share price is also up slightly from its lowest point of $97.87 in September.

Investors have shown some uncertainty regarding Apple following the launch of the iPhone 6, with a pair of controversies that gained international attention. Though the hype around the so-called "bendgate" issue quickly died off when tests showed it took considerable force to bed one of the new, larger iPhones, the company also took a hit when a buggy software update broke cellular connectivity and Touch ID support on the iPhone 6 and iPhone 6 Plus.

With the company generating negative publicity, options betting on a drop in shares of Apple as of Sept. 29 cost 1.89 points more than those predicting an increase, Bloomberg's data found. That's reportedly the widest gap the market has seen since July of 2013.

Apple may have an opportunity to turn things around soon, with the company expected to be planning another media event this month to unveil new iPad models with Touch ID fingerprint sensors, as well as a 27-inch iMac with 5K Retina display.

And Wall Street analysts remain extremely bullish on Apple stock in spite of recent publicity. In the last week alone, both Evercore and BMO raised their price targets, expecting extremely strong sales of the iPhone 6 and iPhone 6 Plus heading into the holiday shopping season.
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Comments

  • Reply 1 of 44
    buckalecbuckalec Posts: 192member
    Shocked - not! The dirty tricks of hedge funds, portfolio managers and the complicit business mass media still astounds me.
  • Reply 2 of 44
    The Bears will be very sorry to hear that the USA trade deficit has fallen and employment numbers are up. I hope the good news kills their wallets.
  • Reply 3 of 44
    rogifanrogifan Posts: 10,669member
    Er, I think the current volatility has more to do with Ebola fears and Europe heading back into recession than hedge funds trading Apple.
  • Reply 4 of 44
    netroxnetrox Posts: 705member

    of course, Apple is to be blamed for everything. /s

  • Reply 5 of 44
    MacProMacPro Posts: 17,998member
    netrox wrote: »
    of course, Apple is to be blamed for everything. /s

    At least this almost puts a positive spin on it for AAPL genuine share holders ... It just amazes me though that the negative crap and FUD that daily assaults Apple is even believed anymore. How many times can paid shills get to cry Wolf and get away with it?
  • Reply 6 of 44
    Quote:

    Originally Posted by AppleInsider View Post



    Though the hype around the so-called "bendgate" issue quickly died off when tests showed it took considerable force to bed one of the new, larger iPhones, 

     

    I don't think that anyone should use force to bed anybody.

  • Reply 7 of 44
    'Bulls and Bears', I don't know. The stock market is a game played by people whose only interest is in making money by ripping off ordinary folks with their tricks. Hence the 'bendy iPhone 6 '. I can't wait to get one, but won't be trying to bend it. Those 'stock marketeers' should get real jobs like the rest of us.
  • Reply 8 of 44
    Quote:

    Originally Posted by island hermit View Post

     

     

    I don't think that anyone should use force to bed anybody.




    only if she likes it that why

  • Reply 9 of 44
    Absolute claptrap from Bloomberg. The story makes no sense whatsoever.
  • Reply 10 of 44
    Thank you media. Thank you bears. I love you both. Keep driving that stock price down so it's cheaper for me. Keep up the bad news! Earnings are the only non-fiction story I care about. And special thanks to the EU for the recent moves towards an Irish tax grab. I love it.
  • Reply 11 of 44
    mactmact Posts: 26member
    Ironically the reputation for reliability means that even minor faults are blown out of proportion.
  • Reply 12 of 44
    alanhalanh Posts: 39member
    Quote:

    Originally Posted by TheOtherGeoff View Post

     



    only if she likes it that why


     

    Or even that 'way'.

  • Reply 13 of 44
    mytdavemytdave Posts: 434member

    Hogwash.  Current volatility is due to world events and the piss-poor policies of the current administration.

  • Reply 14 of 44
    MacProMacPro Posts: 17,998member
    mytdave wrote: »
    Hogwash.  Current volatility is due to world events and the piss-poor policies of the current administration.

    That's an interesting take on Wall Street. So those guys don't actually have any control they are simply at the mercy of said influences. Good to know.
  • Reply 15 of 44
    maestro64maestro64 Posts: 4,453member
    Quote:
    Originally Posted by Rogifan View Post



    Er, I think the current volatility has more to do with Ebola fears and Europe heading back into recession than hedge funds trading Apple.

    as much as this is true, but what they are doing is shorting apple and other company because consumers will stop spending since they think theyare going to die from Ebola. They also shorting Airlines and travel companiess and putting bets on Phama company who may profit from Elbola fears. The point is shorting Apple has much larger overall effect, since as it swings and people see the market swing they begin to do even more irrational things, like pulling money from the market and sit and wait which I am about at that point myself since I am not interesting seeing loses due to irrational investment behavior.

  • Reply 16 of 44
    chabigchabig Posts: 622member
    Neither volatility nor price are set by anyone. They are both the result of buyers and sellers negotiating the price at which shares exchange hands.
  • Reply 17 of 44
    Why is there no incentive for these traders to drive the stock UP to make money ?
    Someone explain, what is the benefit for traders to keep a stock steady ?
  • Reply 18 of 44
    pmzpmz Posts: 3,433member
    Quote:

    Originally Posted by mytdave View Post

     

    piss-poor policies of the current administration.


    I often wonder how many times we'll go through this cycle before people realize its not the current administration...its every administration, because not a damn one of them is a genuine entity with benevolence in mind.

  • Reply 19 of 44
    mhiklmhikl Posts: 471member
    Apple had stupendous fluctuations after the return of Steve and great, quick gains could be had by luck and by the wise, especially by the wise who saw the patterns early. With stupendous jumps comes the trigger happy syndrome as the nervous grab the nickels as they come.

    The wise lie in wait. It is the law of the leopard whose game is stealth, and patience.

    edit: (apostrophe s doesn’t seem to work?)
  • Reply 20 of 44
    Originally Posted by digitalclips View Post

    So those guys don't actually have any control they are simply at the mercy of said influences.



    You‘ll notice that’s not what he said.

     

    Originally Posted by chabig View Post

    Neither volatility nor price are set by anyone.

     

    So the fed setting interest rates, that… doesn’t count?

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