We talked about historic October crashes in our Weekly Wrap and we also wanted to mention how today, October 9, has marked the end of bull markets. It may be just a coincidence, but with Tech falling below 3,100 and Apple (AAPL, $628.72, down $9.45) getting crushed again today, it makes you wonder. Apple has traded to a low of $623.55 today and we said before the week started if $650 didn’t hold a quick test to $620 was in store.
We profiled the WEEKLY Apple October 600 puts (AAPL121012P00600000, $1.60, up $0.50) on Monday after they opened at $1.00. Monday’s high was $1.71 on Apple’s close below $640 but today the puts have traded to a high of $2.40. These options expire this Friday and are still way out-of-the-money (OTM) but they have been tradable.
The regular Apple October 600 puts (AAPL121020P00600000, $5.50, up $1.70) have an extra week of time and were the safer trade. These options are up 45% today but they too are still OTM.
If $620 holds on Apple and the company does announce the iPad mini this week or next, shares could easily zoom back to $650. If there is no announcement and shares continue to pullback, Apple could test $600, or perhaps $575, on an earnings miss.
Apple is scheduled to announce their numbers on October 25.
As we head into the second half of trading, the Dow is down 84 points to 13,499 while the S&P 500 is lower by 11 points to 1,444. The Nasdaq is off 42 points to 3,070.
We have a lot to cover today, including updates on our latest recommendations so let’s go check the tape. Subscribers, check the Members Area for our thoughts and we will be back in the morning with a full update.