Apple stock option traders prepared for a more muted post-earnings reaction than usual


Shares of Apple Inc. AAPL, -1.82% jumped 2.5% toward a 7-week high, ahead of the technology behemoth’s fiscal fourth-quarter report due out after the close, even as options traders are prepared for a more muted than usual stock reaction to the report. An options strategy knows as a straddle, a pure volatility play that involves the simultaneous buying of bullish and bearish options with at-the-month strikes expiring Friday, is implying a one-day, post-earnings stock price move of $4.16 in either direction, according to data provided by Option Research & Technology Services (ORATS). That expected move is 28.5% less than the average one-day post-earnings move over the past 12 quarters of $5.82 in either direction, according to ORATS Principal Matt Amberson. At current prices, that means the stock would have to close below $148.41 or above $156.73 for straddle buyers to make money. The stock, which is trading 2.6% below the Sept. 7 record close of $156.69, has gained 15.0% year to date, while the tech-heavy Nasdaq 100 NDX, +0.46% has rallied 22.2% and the Dow Jones Industrial Average DJIA, +0.25% has advanced 16.5%.

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