Bearish Bet on Apple Inc. (AAPL) Worth $26 Bln Ahead of its Media Event

Apple Inc. (NASDAQ:AAPL) witnesses a huge move in options markets with regards to its volatility on the back of the launch of new products. CNBC‘s Dan Nathan pointed out one significant bearish transaction that is worth around $26 billion.

AAPL Apple Store

The move was witnessed despite no sign of abnormality in the volume of the options traded. In fact, the daily volume was only three fourths of the average monthly volume for the last month, Nathan added.  At the heart of this volitality move for Apple Inc. (NASDAQ:AAPL)’s options was the purchase of 25,000 Septemer 12 weekly puts with a strike price of $90 and a unit price of $0.25. Put options mean that the holder bets on the stock price to go down. In this particular case since the stock was trading about $98.8 when this purchase was made, it would mean that the trader is expecting Apple Inc. (NASDAQ:AAPL)’s price to fall below $89.75 by this Friday. At a level of 9.5%, it is no small dip that they buyer is expecting which translates into a market cap move of almost $50 billion.

Nathan was just short of proclaiming the move ridiculous, when he said that most of the information about Apple Inc. (NASDAQ:AAPL)’s products has already been on the streets, there is no way that the stock price of the consumer electronics’ giant could fall by that much by Friday.

It is true that it’s the speculation ahead of Apple Inc. (NASDAQ:AAPL)’s media event that has led the company’s implied volatility to reach levels, which usually prevail before a company publishes its earnings report. However, despite the speculations, which Nathan mentioned have been already circulating, there is still a great deal of uncertainty as to how much revenue those features could add to the company’s top line. Of course, we are assuming here that those speculations have considerable weight, which could or could not be the case.

Disclosure: none