Options data reveals a notable surge in bearish sentiment surrounding both Palantir and Apple as they approach their earnings announcements. For Apple, of the 620,000 options traded by midday, 385,000 were puts, indicating a strong expectation of a decline in the stock price. The price of puts is at the 86th percentile of the past year, suggesting heightened investor anxiety.
Apple has seen a 25% increase in its stock price year-to-date, yet it is trading with a negative correlation to the Nasdaq 100 Index, which may be fueling concerns about its upcoming earnings. The options market is implying a nearly 4% move for Apple, which is larger than the average 2.5% swing observed after earnings in the past two years.
Similarly, Palantir's options are also leaning bearish, with puts trading at the 97th percentile of the past year. The market is pricing an 11.5% implied move for Palantir, compared to a 10% average over the last two years. Notably, a significant trade involved the purchase of 750 in-the-money 250-strike puts for Palantir, totaling $5.1 million, indicating a strong bet against the stock.
This overall bearish sentiment could lead to increased volatility for both stocks following their earnings reports