Apple Making All-Time Highs On Electric Car Developments: Option Analysis

Apple Inc AAPL is having a strong week, making all-time highs, currently holding around the $160 level and trading up about 6% on the week. The stock was bolstered by a slew of news reports, including new reports on the Apple Car project, or Project Titan.

SEE ALSO: Cupertino Focuses on Fully Autonomous Vehicle With Apple Car Project

Needless to say, bullish traders have taken kindly to the news, with the stock breaking its prior all-time highs around $157 on strong volume to end the week. On Friday alone, the stock has traded over 76 million shares versus its 10-day average of 68 million shares.

What has been impressive is in the options market, with over 2.4 million contracts traded on the day (image below).

Why It Matters: Prior to Friday, Apple had approximately 4.4 million calls and 3.7 million puts for a total of 8,100,000-plus options. Today's 2.4 million-plus options represent 29% of the total options traded in one day.

It's important to note that 25% of those 8,100,000 options are set to expire today, so it's highly probable a good portion of these options traded are contracts being closed or monetized.

But the heavy amount of calls traded today (79%) suggests the flows aren't just options being closed, but a large portion of calls being added to the market.

What's Next: The largest strike by volume for the calls expiring Friday are at the $160 strike (image below), which is where the stock has been trading around for the last two or three hours.

This large volume of calls at the $160 strike could "pin" the market here into the close. It's important to note how the volume for the $162.5 strike falls of materially. This suggests its less likely the stock is able to close above the $162.5 strike to end the week.

Looking forward, the largest strike by volume and open interest for the Nov. 26 expiry is the $160 strike, suggesting that option traders are comfortable with Apple at these prices.

Should the stock start to track below $160, there is strong volume and open interest at the $155 strike suggesting option traders may step in there to get long.