Strike Prices Acting as Tech Share Price Magnets (AAPL, GOOG, AMZN, INTC)

An adage in options trading is that the closest and most active strike prices tend to act as magnets that draw share prices that direction as options expiration date gets closer and closer.  So far we are seeing very active options expiration trading in some of the usual suspect technology stocks that otherwise have no news outside of Intel fallout.  We are seeing evidence of this in the high-priced NASDAQ tech stocks in Apple Inc. (NASDAQ: AAPL), Google Inc. (NASDAQ: GOOG) and Amazon.com Inc. (NASDAQ: AMZN).  Intel Corporation is now of course seeing a sell-the-news reaction so far, but that is no longer a surprise today compared to if you would have expected that yesterday in the after-hours trading session when Intel was up 2% rather than down 2% now.

Today is options expiration date and we have taken snapshots of options trading volume against the open interest below.  As a reminder, these options all expire at the close of business today.

Apple 11:05 AM EST snapshot:

• $210.00  CALL 28,101 traded versus open interest of 43,161
• $210.00  PUTS 16,360 traded versus open interest of 26,746

Google 11:06 AM EST snapshot:

• $590.00 CALL 10,966 traded versus open interest of 8,642
• $580.00 PUTS 4,281 traded versus open interest of 10,048
• $590.00  PUTS 7,083 traded versus open interest of 10,724

Amazon.com 11:09 AM EST snapshot:

• $130.00 CALL 21,494 traded versus open interest of 14,966
• $125.00 PUTS 5,920 traded versus open interest of 15,608
• $130.00 PUTS 5,350 traded versus open interest of 10,522

Intel 11:08 AM EST snapshot:

• $20.00 CALL 12,795 traded versus open interest of 204,681
• $21.00 CALL 34,456 traded versus open interest of 112,796
• $21.00 PUTS 28,026 traded versus open interest of 79,639

This is a phenomena which sometimes comes to pass and sometimes does not.  We would generally characterize each options expiration date as being different than options expiration dates of the past.  As far as what the impact of this is for next week or longer-term, that is something we would definitely characterize as far less important than many options traders would.

At 11:30 AM EST we have the following prices in the stocks:

• Intel $21.05; Down $0.43 (-2.00%)
• Apple $208.2722; Down $1.1578 (-0.55%)
• Google $586.73; Down $3.12 (-0.53%)
• Amazon.com $128.60; Up $1.25 (+0.98%)

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JON C. OGG