Clearly you haven't been following Apple over the years. Anyone who thinks options aren't important in how AAPL trades has not been paying attention.
Apple has been a unique stock over the past few years because the options market in it has been so huge. That has changed with the split. However, there are still some expiration dates where options were getting sold pre-split. Tomorrow is one such date.
The 50DMA has nothing to do with this drop. Anyone with half a brain should have looked at Max Pain for the July options and realized that the stock would drop hard through Friday.
As last month showed, expiration dates for options sold pre-split are extremely volatile. It takes less money to hit a precise strike price, after all. However, the amount of money tied up in post-split options is rather small so hopefully these wild swings will be a thing of the past, soon. The August, October and January monthlies, though, should still be bumpy.
This week was special because most of the options were bought pre-split and so the number of outstanding options was huge. Hopefully going forward the option volume will be a lot less and therefore less profitable for the manipulators.
However, since the July, October, January 2015 and January 2016 options were available pre-split, the volume for those months will be quite a but higher. As such, expect a lot of manipulation on those three expiration days.
Why is this considered news? Just about every day there has been a new rumor claiming the same thing. Stocks don't normally pop just because someone declares that the sky is blue and water is wet.
I am sure Tim Cook was in a meeting and walked out the moment he saw the stock drop .75% so he could rush unfinished products to market. He wouldn't want mntam2 to loss any money on his options that expire tomorrow. Who cares if the new products fail due to being released too early. Pleasing short-term investors/weekly option traders is far more important.
You should probably wait a while before making such a statement. The June monthlies expire tomorrow and quite a few of those were purchased pre-split. Hopefully going forward the option market in Apple will shrink. For now, though, there are still a few pre-split strike dates that need to work their way through of the system. Tomorrow is one such date.
If Apple fired its CEO every time the stock dropped .5%, the company would sure burn through a lot of executives quickly.
The volume was 20 million on May 30th, not 140 million. Yahoo seems to have decided since the stock did a 7-1 split, they would multiply the pre-split volume by 7 as well.
You are nuts if you think this will close at $93.50 today. As last week showed, the option sellers are still at work on AAPL and the monthlies expire on Friday. Max Pain is currently at $88.57. The rest of the week should get ugly.
Hopefully after the split people will stop buying so many options so the call sellers won't have as much incentive to manipulate the stock price.
It is option manipulation Friday. Have people already forgotten that this usually happens every week? Just wait until next Friday, that is when the monthlies expire. The drop will likely be far worse.
Hopefully with the lower stock price people will start buying the shares rather than the options so this weekly cycle won't happen so often.
It is just the usual Friday options expiration drop. Have people already forgotten that Friday is always a down day?
Betting against Apple now seems like a bad idea. The company has shown that not only is it not dead, it still has modest growth in it. Enough to settle it in the 14-15 PE range. Also, with the modest growth and buybacks, EPS will go up way more than expected. Analysts are going to have to revise their numbers upwards in the next few months. A PE of 14 and EPS of 45 would give the company a price of 630.
Google and Apple seem intertwined. And it sure looks like there is a rotation out of Google and back into Apple. Google's growth is definitely slowing down and it looks like the Goog will hit the law of large averages soon. It will probably go through a rough patch just like Apple where it transforms into a value stock. With a PE of 27, though, its transition will likely be even more painful than Apple's was.
There are at least three reasons. First, it makes Apple eligible to be on the Dow. Also, since Apple peaked at 700, the 7-1 split gives Apple a nice target to shot for. When it hits 100 the company knows it reached a new high. And third, as you mention, the stock was heavily manipulated. It would routinely drop big on a Friday for no reason other than the price was above the pin level. Funds seem to have been scared away. The split seems to be an attempt to disinfect the pool and make the trading safe for value investors who don't like wild, seemingly random swings.
Of all the earnings reports to question, Apple sure seems like a very odd choice. Apple doesn't use non-GAAP numbers and if anything, the company understates earnings by using deferred revenue and taxes. For example, last quarter Apple reported $13 billion in earnings even though it had over $20 billion in free cash flow.
Is it really so hard to grasp that Apple did the split so could be added to the Dow in the near future?