It's not just the neoclouds and hyperscalers that investors are anxious about.
Options data show a surge in bearish trading in anticipation of both Palantir and Apple earnings Monday afternoon. The two stocks have been on trajectories that are distinct from the broader AI trade – with Apple, in particular, trading almost inversely to the Nasdaq 100 Index – but that's not stopping speculators from betting on a reversal in their shares after earnings.
Of the 620,000 options traded on Apple by midday, 385,000 were puts, with at least 113,000 puts likely initiated by buyers, compared to just 64,000 calls bought, Cboe LiveVol data show. At the same time, the price of puts reached the 86th percentile of the past year, compared to the 51st percentile for calls, according to data from Nations Indexes.
Apple stock is up 25% this year and currently trading with a negative 0.65 correlation with the Nasdaq 100, ThinkOrSwim data show. Options are implying just under a 4% move for the stock, compared to the average 2.5% swing after earnings the past two years, according to LiveVol.
Palantir options flows are also leaning bearish, with more puts trading than calls by volume and the price of puts at the 97th percentile of the past year, according to Nations Indexes. Calls are pricey, too, but not as much – they're in the 76th percentile.
Traders should be ready for a big move in Palantir: market-makers are pricing an 11.5% implied move, compared to the 10% average the past two years. The stock rallied almost 30% after its last report, but sold off after earnings in May.
The biggest trade in Palantir Monday was someone opening a new position buying about 750 in-the-money 250-strike puts expiring mid-February for a total $5.1 million.
