Apple, Palantir options trading turns bearish ahead of earnings

Traders Union
All News
Stocks
Apple, Palantir bearish ahead of earnings

Highlights

Apple options trading sees a surge in bearish sentiment pre-earnings, with 385,000 puts traded and put prices in the 86th percentile for the year.
Palantir options volumes are also skewed bearish, with put prices in the 97th percentile and a notable $5.1 million in-the-money put trade opened ahead of earnings.
Implied volatility in both stocks spikes, with Apple options implying a nearly 4% move versus a 2.5% historical average, and Palantir at 11.5% versus a 10% two-year average.

Options pricing signals caution before results

As reported by CNBC, options data show a sharp increase in bearish trading tied to both Apple and Palantir before their latest earnings releases, even as the two stocks follow trading patterns that differ from the broader AI theme.

By midday, about 620,000 Apple options have changed hands, including 385,000 puts. Cboe LiveVol data indicate at least 113,000 of those puts are likely initiated by buyers, versus 64,000 calls bought. Data from Nations Indexes also show Apple put prices reaching the 86th percentile of the past year, compared with the 51st percentile for calls.

Palantir options flows are also leaning bearish, with more puts than calls trading by volume. According to Nations Indexes data, the price of Palantir puts reaches the 97th percentile of the past year, suggesting traders are seeking downside exposure or protection at elevated premiums.

Volatility expectations rise for both stocks

Apple shares are up 25% this year and are currently trading with a negative 0.65 correlation to the Nasdaq 100, according to ThinkOrSwim data. LiveVol data show options are implying a move of just under 4%, above the average 2.5% swing after earnings over the past two years.

For Palantir, market-makers are pricing an 11.5% implied move, compared with an average 10% post-earnings move over the past two years. The stock rallies almost 30% after its previous report, but sells off after earnings in May.

The largest Palantir trade on Monday is a new position involving the purchase of about 750 in-the-money 250-strike puts expiring in mid-February, for a total premium of $5.1 million. The size and structure of that trade underscore how aggressively some market participants are positioning for a downside move after results.

Our earlier analysis of the S&P 500 (SPX) drop highlighted how earnings-season headlines and shifting rate expectations were driving choppy, risk-sensitive trading, even as tech and AI-linked names attempted a rebound. We noted that the index was sitting below key 20- and 50-day moving averages, with mixed momentum signals pointing to fragile consolidation and elevated sensitivity to the next move through nearby support and resistance levels.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.