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Apple Options Traders Bet Against Cathie Wood

Apple Inc (NASDAQ: AAPL) gapped up 1% Friday morning following big bullish moves in market ETFs such as SPDR S&P500 and Nasdaq 100.

05/07/2021 13:37

Apple Inc (NASDAQ:AAPL) gapped up 1% Friday morning following big bullish moves in market ETFs such as SPDR S&P500 and Nasdaq 100.

As the saying goes “gap ups are for selling and gap downs are for buying” and by Friday afternoon Apple’s stock had dropped down to fill the gap before trading back up at the $130 mark.

News that Cathie Wood’s ARK Fintech Innovation ETF (NYSE:ARKF) sold $38.73 million worth of Apple shares on Thursday didn’t deter a number of Apple options traders from betting over $1.97 million the stock is headed higher.

The Apple Option Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:

  • At 9:40 a.m., a trader executed a call sweep, near the ask, of 1892 Apple options with a $130 strike price expiring on May 7. The trade represented a $124,872 bullish bet for which the trader paid 66 cents per option contract.
  • At 9:52 a.m., a trader executed a call sweep, near the ask, of 423 Apple options with a $130 strike price expiring on June 2022. The trade represented a $681,030 bullish bet for which the trader paid $16.10 per option contract.
  • At 9:54 a.m., a trader executed a call sweep, near the ask, of 448 Apple options with a $130 strike price expiring on June 2022. The trade represented a $723,520 bullish bet for which the trader paid $16.15 per option contract.
  • At 10:09 a.m., a trader executed a call sweep, near the ask, of 2979 Apple options with a $130 strike price expiring on May 7. The trade represented a $223,425 bullish bet for which the trader paid 75 cents per option contract.
  • At 10:20 a.m., a trader executed a call sweep, near the ask, of 500 Apple options with a $145 strike price expiring on July 16. The trade represented a $69,000 bullish bet for which the trader paid $1.38 per option contract.
  • At 10:21 a.m., a trader executed a call sweep, near the ask, of 501 Apple options with a $145 strike price expiring on July 16. The trade represented a $70,140 bullish bet for which the trader paid $1.40 per option contract.
  • At 10:21 a.m., a trader executed a call sweep, near the ask, of 601 Apple options with a $145 strike price expiring on July 16. The trade represented a $84,140 bullish bet for which the trader paid $1.40 per option contract.

Check out the Raz Report podcast with Cathie Wood

Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.

AAPL Price Action: Shares of Apple were trading up 0.6% to $130.32.