Apple, Inc. (AAPL), Trending Stock Report

One of the Magnificent Seven stocks, Apple Inc. (AAPL), is always trending in news & social media mentions mentions. This morning AAPL is getting a bump in the news because Morgan Stanley designated the stock as “top pick.” Morgan Stanley’s analyst Erik Woodring said Apple Intelligence (Apple’s new AI Feature) is a “clear catalyst” for a multi-year upgrade cycle. Morgan Stanley’s analysts are not the only ones upgrading AAPL citing the new Apple Intelligence feature.

From an options trader’s perspective, the options expiring October 18th may be underestimating the chances for a bigger-than-expected move.

This Volatility Term Structure for AAPL shows us the implied volatility of the at-the-money options for the October 18th expiration will give us the most amount of time (69 trading days) for a low relative cost. To learn more about Volatility Term Structure, click here. The iPhone 16 mentioned by analysts is just one potential catalyst. Many potential stock-moving catalysts that are currently unknown could drive AAPL shares higher or lower in that time frame.

This MDM graph compares the modeled expectations of current options prices (the orange line) to the actual movement of AAPL’s stock price over the past 3 years. You can see that the actual behavior (the blue histogram) shows us that AAPL made big moves more frequently than the modeled options prices expect. This tells us that option buyers have the advantage if AAPL continues to behave the way it did over the last 3 years.

This Volatility Cone shows us that the volatility expectations (the yellow dots) for the 3-month term are below the 3-year historical volatility average. To learn more about the Volatility Cone, click here. This confirms that AAPL options are relatively inexpensive for options expiring in October.

AAPL is getting a boost in news and social media due to Analyst’s upgrades. If the stock does in the next 3 months what it did in the last three months, the October options are underestimating the chances for a bigger-than-expected move. This is an option buying situation.

To get the details on today’s trades, be sure to read today’s ODDS Online Daily Option Trade Idea.