After a Stagnant July, Surging 20% to Approach New Highs: Options Market Reveals "Bullish" Signals Ahead of Apple's Earnings

Ahead of Apple's major earnings test, the options market is sending out unusual bullish signals—against the backdrop of the broader US stock market being stuck in two months of oscillation, Treasury yields hitting new highs, and both Google and Tesla's earnings disappointing the market, Apple has become the only stock among the top ten components of the S&P 500 with its share price approaching historical highs.

Apple will release its latest quarterly earnings after the US market closes this Thursday. Prior to this, large capital in the options market is heavily buying in-the-money call options, while speculative funds are betting that the stock price will break through historical highs before this Friday. Meanwhile, the post-earnings volatility implied by option pricing is close to 4%—a figure far exceeding the historical volatility level of about 1% on average over the past year. According to Cboe LiveVol data, this is an abnormally large Implied Volatility.

Apple's stock price nearly treaded water during the first seven months of this year, but has accumulated a gain of about 20% since the low at the end of June, less than $2 away from the new historical high set two weeks ago. As the broader market faces pressure, Apple is viewed by the market as a rare safe haven, and its ability to boost market sentiment is highly anticipated.

Options Trading Structure Significantly Bullish, Large Capital Replaces Stock Holdings with Call Options

Last Friday, the trading structure in Apple's options market showed a clear dominance of long positions.

According to SpotGamma data, the total premium for Apple options traded that day reached $590 million, of which $442 million was related to call options. ThinkOrSwim data also showed that approximately 560,000 call option contracts were traded that day, compared to only about 332,000 put option contracts.

The largest single transaction of the day was particularly noteworthy: a trader opened a new position, buying Apple call options with a strike price of $280 expiring in mid-August, with a total premium scale reaching $2.6 million. The Delta value of this option is close to 1, meaning this position is essentially equivalent to directly holding the underlying stock, representing a strong bullish bet using options as a substitute for stocks.

Strike Prices of 320 and 340 Reveal Two Main Lines: Long Defense and Breakout

Looking at the distribution of open interest for options expiring this Friday, according to BarChart data, the strike price of $320 has the largest open interest, with approximately 13,000 call options and about 5,000 put options. This structure indicates that even if the earnings report fails to trigger a significant rise, the market remains highly confident that last week's lows can be held.

Meanwhile, the two most actively traded options expiring this Friday last Friday presented both defensive and offensive logics:

The most active was the put option with a strike price of $300, with a total of 7,500 contracts traded and total premiums of about $374,000, belonging to small-scale hedging; the second most active was the call option with a strike price of $340, with a total of 5,000 contracts traded and total premiums reaching $2.3 million, according to SpotGamma data.

Calculated based on last Friday's closing price, the quoted price for this $340 call option was $4.25, requiring Apple to rise by about 3.4% this week and break through the historical high of $335 for the buyer to profit.

Analysts: Apple May Become the Market's "Stabilizer" This Week

Nigam Arora, founder and contributor of The Arora Report, stated, "I believe there is a considerable probability that Apple will help stabilize the market this week. Investors view Apple as a defensive stock because, compared to several peers, Apple has not spent hundreds of billions of dollars betting on AI capital expenditures."

This viewpoint carries significant weight in the current market context. Currently, the broader US stock market has been stuck in a stagnant market for nearly two months, Treasury yields continue to rise, and the earnings season performance of large-cap tech stocks has been mixed. The market needs new positive catalysts. Whether Apple's earnings report can play this role, the options market has already given a directional judgment with real money.