Shares of consumer tech giant Apple (AAPL) have been in a range near all-time highs over the past few months. One trader sees shares moving higher in the coming weeks.
That’s based on the May 13th $180 calls. With 36 days left until expiration, 16,046 contracts traded compared to a prior open interest of 330, for a 49-fold jump in volume on the contract. The buyer of the calls paid $3.90 to get into the trade.
The stock recently traded near $175, so shares would need to rise about $5, or just under 3 percent, for the option to move in-the-money. Apple reports earnings on April 28, which could see a big move higher in shares then.
Shares are up 41 percent in the past year, and the company continues to post double-digit earnings and revenue growth.
Action to take: Investors may like shares on any pullback. They’re now just slightly off the all-time high of $182 per share. At current prices, shares yield just 0.5 percent, but there’s room for more dividend growth down the line.
Traders should consider the May option as an inexpensive way to trade earnings. Shares could also rise with the overall market in the coming weeks as well. With this kind of trade, consider taking profits on a mid-to-high double-digit return.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.