TD Ameritrade Chief Strategist: 'Apple Puts Are Trading 2 Times Normal Amount Today, Calls Trading 1.3 Times Higher'

Speaking to Benzinga, TD Ameritrade Chief Strategist JJ Kinahan said that the market is pricing Apple Inc. AAPL a little under 6 percent for the post-earnings move.

Order Flow

When analyzing TDA order flow over the past couple of weeks, Kinahan said he thinks thre are a lot of people playing this on the bullish side.

“Last week, and it has continued this week, the $115 weekly call has been the option du jour,” he said.

Kinahan went on to say that in today’s action, Apple puts are trading 2 times their normal amount, whereas the calls are trading only 1.3 times their normal amount. He pointed out that there was one trade earlier today in the January $105 puts in the weeklies.

“That’s a little bit of a different wrinkle today that we hadn’t seen over the last few days. But if I go with the trend, the trend would be to those $115 calls,” he said.

Where the market is pricing things right now on the $115 calls, Kinahan said there’s about a 67 percent probability that Apple will touch $115 and a 48 percent probability it could hit $105.

Retail Trading Favorite 

Apple is one of TDA’s top-traded stocks every day and a retail trading favorite, according to Kinahan.

“It draws in a loyalty that you don’t normally see in terms of products and trading on the stock,” he said.

He added that one of the wrinkles in the conference call and the report that analysts would be looking for very heavily is what was the effect of the dollar strength on their sales.

Apple is down 1.68 percent on the day.

Brianna Valleskey contributed to this report.