Stock options suggest calm ahead of Apple launch
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NEW YORK (Reuters) - Options activity surrounding Apple shares on Wednesday could best be described with an iPhone ringtone: crickets.
Implied volatility, a key factor in determining options pricing, was at the lowest it has been since 2009 ahead of an Apple (NASDAQ: AAPL) product launch. This means options traders were not foreseeing a post-launch jolt in the stock price.
Hours ahead of the launch, options prices for Apple showed the expectation was for the stock to move less than 2 percent by Friday, compared with historic moves in the week after a product launch of 3.5 percent in any direction.
Apple was expected to unveil the newest iteration of its iPhone at an event later on Wednesday.
Going back to 2009, a comparison of implied volatility on Apple's options ahead of its last seven product launches shows expectations for a jolt in the price after Wednesday's launch rank as the lowest by a wide margin.
For the last seven major launches, the 30-day at-the-money implied volatility for Apple options has averaged about 37 percent within a range of 28 percent to 53 percent, according to Reuters data.
At near 19 percent, implied volatility was at its lowest ahead of a new product introduction. That speaks volumes to the expectation, but may also catch the market sleeping.
Outside of an Apple event, the current implied volatility is only slightly above the historic low near 16 percent recorded last month, on data going back to 2006.
Online chatter in China showed even consumers are not as buzzed as they usually are ahead of a new Apple product.
(Reporting by Rodrigo Campos; Editing by Meredith Mazzilli)
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