With AAPL back to making new highs on a daily basis, the options market is once again being dominated by this behemoth. Of 10 of the most traded option strikes yesterday, 7 were AAPL call strikes, all expiring on Friday, August 24th. That’s the height of speculation, but it’s also worked for the majority of the year. Interestingly, the most traded single stock option contract yesterday was in Facebook. The Aug 24th expiry 20 calls traded more than 50,000 times over the course of the day.
As AAPL’s market cap has rapidly grown this year, its impact on the broader indices has grown as well. Yesterday, its contribution to the SPX was almost 0.15%, and its contribution to the QQQ ETF was 0.5%. I’ve started paying more attention to second-tier indices like the Mid-Cap and the Russells for a better gauge of the broader market because AAPL is so dominant in the large cap indices. That doesn’t mean AAPL is not important. It certainly is. It just skews the gauge of the broader market measures with its singular strength.
Markets overnight were a little more active.
- After Asia closed around flat in most regions, Europe took up the risk-on bid as has become customary over the past month.
- Commodities have rallied on broad dollar weakness, with the Euro approaching its 30 day high against the dollar around 1.2450.
- European stocks are up about 0.5%, and SPX futures are up 0.2%.
- Peripheral 10 year bond yields in Italy and Spain are near 2 month lows as speculation mounts that the ECB will cap yields in those countries.
- No economic data of note today. The FOMC minutes tomorrow afternoon will be the focus.