Apple options are doing something unusual into earnings

The US stock market is in a two-month stretch, with bond yields reaching new highs and yields Alphabet And Tesla’s He dropped the ball. Taurus needs a hero.

To enter AppleIt is the only stock among the ten largest stocks in the S&P 500 that is near its all-time high.

After going nowhere for seven months, Apple shares are up 20% since their late June low and are less than two dollars shy of a new all-time record set a week ago.

Apple reported earnings after the bell on Thursday, and options traders are banking on the stock’s recent strength; Based on trades made before the market close on Friday and the open interest that has accumulated around the stock this summer, big money traders are taking profit calls and speculators are looking for a ramp to new highs by this Friday.

Of the $590 million in option premiums traded on Apple on Friday, $442 million were tied to calls, according to SpotGamma. ThinkOrSwim data shows investors purchased almost 560,000 calls compared to just 332,00 puts. Perhaps more importantly, according to Cboe LiveVol data, option prices are currently pointing to an upside of almost 4% for Apple following earnings; This is an unusually large move given the historical average volatility of 1% over the past year.

“I think there’s a pretty good chance Apple will help stabilize the market this week,” said Nigam Arora, founder and author of The Arora Report newsletter. “Investors view Apple as a defensive stock because, unlike many of its peers, it is not spending hundreds of billions of dollars on AI investments.”

The biggest trade in Apple on Friday was when someone opened a new position in a $2.6 million 280-strike call on Apple that expired in mid-August; this was a bullish position with a delta close to one, meaning that the swap served as a stock exchange for the owner.

The largest open interest in options expiring this Friday is at $320, with 13,000 calls and 5,000 puts, according to data from BarChart. This shows that investors are confident that last week’s lows will continue, even if earnings do not lead to a rally.

The most popular contract expiring Friday in terms of volume purchased on Friday was the 300-strike put contract, where 7,500 contracts were traded but the total premium was only $374,000. The second most popular call was 340 strike calls with 5,000 contracts totaling $2.3 million in premiums, according to SpotGamma data.

This contract is running at $4.25 as of Friday’s close, meaning buyers expect Apple to rise 3.4% this week to above its all-time high of $335.