After a sideways trend in July, a 20% surge pushes towards new highs; ahead of Apple's earnings report, a "bullish" signal appears in options.

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Before Apple’s major earnings report, the options market is sending unusual bullish signals—while the US stock market has been choppy for two months, Treasury yields are hitting record highs, and earnings from Google and Tesla have disappointed, Apple is the only one among the top ten S&P 500 stocks whose price is nearing its all-time high.

Apple will announce its latest quarterly results after the US market closes this Thursday. Prior to this, large players in the options market are buying in-the-money call options en masse, while speculative funds are betting that the stock will break through its all-time high before this Friday. Meanwhile, the implied post-earnings volatility in option pricing is close to 4%—far above the roughly 1% average over the past year. According to Cboe LiveVol data, this is an unusually large level of implied volatility.

Apple’s stock price barely moved in the first seven months of this year, but has rallied about 20% from the late June low, and is now less than $2 away from the new all-time high set two weeks ago. As the market overall comes under pressure, Apple is seen as a rare safe haven, with hopes high for its positive impact on market sentiment.

Options Deal Structure Significantly Bullish, Big Money Using Calls to Replace Shares

Last Friday, the structure of trades in Apple’s options market showed a clear dominance of bullish positions.

According to SpotGamma data, total option premium traded reached $590 million on the day, with $442 million related to call options. ThinkOrSwim data also shows roughly 560,000 call option contracts traded, compared to just about 332,000 puts.

The single largest trade drew particular attention: a trader opened a new position, buying Apple calls with a $280 strike expiring mid-August, for a total premium of $2.6 million. This option’s Delta is near 1, meaning the position is essentially equivalent to owning the stock outright—a strong bullish bet using options instead of shares.

320 and 320 and 340 Strike Prices Reveal Bullish Defense and Breakout Narratives

Looking at the open interest distribution for options expiring this Friday, BarChart data shows the largest open interest is at the $320 strike, with about 13,000 calls and 5,000 puts. This structure suggests that even if the earnings report fails to catalyze a clear rally, the market is confident last week’s lows can hold.

Meanwhile, Friday’s two most actively traded contracts for options expiring this week illustrate both defensive and aggressive logic:

The most actively traded were $300 strike puts, with 7,500 contracts traded for total premiums of roughly $374,000—a small hedge; second most actively traded were $340 strike calls, with 5,000 contracts traded for total premiums of $2.3 million, according to SpotGamma data.

Based on last Friday’s closing price, the $340 call option was quoted at $4.25, meaning the buyer needs Apple to gain around 3.4% this week and break its all-time high of $335 to be profitable.

Analysts: Apple May Serve as Market "Stabilizer" This Week

Nigam Arora, founder and writer of The Arora Report newsletter, stated, “I think there’s a considerable probability that Apple will help stabilize the market this week. Investors view Apple as a defensive stock, as it has not spent hundreds of billions on AI capex like some of its peers.”

This view carries weight in the current context. US stocks have been range-bound for nearly two months, Treasury yields keep rising, and the recent earnings season for big tech has delivered mixed results. The market needs a new positive catalyst. Whether Apple’s earnings can play this role is already being judged with real money in the options market.

Risk Warning and DisclaimerThe market carries risks, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account individual user’s specific investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are appropriate for their particular circumstances. If you invest based on this, you assume full responsibility. ```