The tariff exemption led to a surge in Apple's stock price, and bullish options trading yielded significant profits
Apple's stock price surged due to the Trump administration's approval of smartphone tariff exemptions, rising as much as 7% on Monday, closing at $206.05. Options traders built a position in call options worth about $5 million on Friday, which had a paper value of approximately $14 million in Monday's early trading, an increase of up to 180%. This trade hopes for Apple's stock price to rise above $210 in the next two weeks, with a maximum potential profit of about $30 million
Reuters New York, April 14 - An unidentified options trader has bet millions of dollars on a short-term rebound in Apple’s stock price. Following the Trump administration's approval of smartphone tariff exemptions over the weekend, Apple’s stock surged on Monday, yielding substantial returns on the investment.
On Monday, Apple’s stock rose as much as 7%, reaching $212.94, before narrowing the gains to close at $206.05, a 4.5% increase.
According to Reuters calculations, the surge in Apple’s stock price means that call options purchased on Friday for about $5 million had a paper value of approximately $14 million in early trading on Monday, an increase of up to 180%.
Ophir Gottlieb, CEO of Capital Market Laboratories, stated that the bullish trades on Friday might have been traders speculating that tariffs on Apple or the entire China would be postponed over the weekend.
He said, "This rumor circulated during Friday's market trading hours."
According to Reuters' analysis of Trade Alert data, when Apple’s stock was around $192.69 on Friday, approximately 35,000 contracts of the 210/220 call spread options expiring on April 25 were seemingly purchased, totaling about $5.25 million.
The call spread trading on Apple on Friday was one of the largest single-stock options trades of the day, betting on Apple’s stock price to rise in the next two weeks, exceeding $210 by April 25. If Apple’s stock price exceeds $220 at that time, the maximum potential profit would be about $30 million.
Based on the stock price at the time of the trade, the trader expected Apple’s stock price to rise by 14%, approaching the price before President Trump announced the tariff increase on April 2
