Are Traders Using Apple To Move Indices?

Nic Chahine thinks that even though Apple Inc. AAPL was reweighted from 25 percent to 12 percent of indices, traders and investors are still using it as the tail that wags the dog.

Chahine is an options expert and the author of Create Income With Option Spreads, and he recently joined Benzinga’s #PreMarket Prep to talk about how traders profited from the Apple flash crash last week.

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Chahine said that Apple had no business in rallying leading up to the flash crash December 1. He said there was nothing new, but people still bought it up against resistance for weeks.

“My thought on Apple is they walk the price up in order to profit on the indices side, and then they dump Apple and are out,” he said. “They double their profits. They use these big tickers that can move indices.”

Chahine said he himself couldn’t short the stock. He was out of it and couldn’t follow it.

“I have no conviction with it,” he said. “Long-term, maybe. But for last week, it had no reason getting to where it got.”

After the stock experienced the flash crash, Chahine said people shrugged it off. He said nobody talked about it or looked into it.

“That’s a big ticker. We needed to look into it,” he said.

Chahine also talked about Google Inc GOOGGOOGL and Bank of America Corp BAC.

Check out his full interview here:

Don’t forget to tune in to Benzinga’s #PreMarket Prep broadcast Monday-Friday 8-9:45 a.m. ET for a live, interactive morning show with veteran traders and featured finance industry experts ready to answer your questions for the trading day.