No, it means that an *unprecendented* number of short-term players betting big-time, that AAPL will bolt upwards as a result of tomorrow's earning announcements.
Someone please correct me if I'm wrong (I mean that), but it is my understanding that the exact opposite is the case. Someone(s) wrote all those calls, sold them to us, and presumably would not have done so if they anticipated a big run-up in the price. Thus, it is my understanding that the large open interest indicates, rather, a short-term pessimistic sentiment. Further, is it not reasonable that a significant fraction of this interest represents people who held during the run to 27-28 writing covered calls, again in expectation that they would not be assigned? Don't get me wrong, I'm neck deep in April 25s. I am also fully aware there are more reasons people or entities write calls than the above, but those seem pretty likely with all the wondering about whether AAPL has peaked, or is fair valued, or will post a nice profit, or whatnot. Again, I'm no expert on options mechanics, so if I'm mistaken I beg correction from someone who knows more.
- George |
