U.S. stock volatility blamed on Apple bears in options market
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.
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.
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.
Comments
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?
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.
I don't think that anyone should use force to bed anybody.
only if she likes it that why
only if she likes it that why
Or even that 'way'.
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.
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.
Someone explain, what is the benefit for traders to keep a stock steady ?
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.
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?)
You‘ll notice that’s not what he said.
So the fed setting interest rates, that… doesn’t count?