Its been quote a year for Apple stock. The April earnings were a big upside surprise. The stock moved from the low 500s to the low 600s. AAPL then proceeded to split 7 to 1. This changed the stock price from nearly $700 to $100. It also fueled rumors of AAPL getting add to the DOW. Next, the Apple iPhone 6 release is supposed to happen this fall.
What has this done for AAPL options. I expected to see to the weekly option open interest in AAPL to drop after the split. Sure, I thought there might be post split buying. But I expected to drop over time since the stock was now affordable. To the contrary AAPL options remain the most traded weekly options. That is good for max pain. More calls purchased means more offsetting stock bought by the option writers. This larger hedge means more shares traded during rebalancing and therefore a greater effect on the stock.
In addition, the Poormans algorithm still seems to work. This is where investors buy options on Monday. The MM sells these options and takes a short position. The MM takes a long position in the stock at the same time to remain neutral. This drives the price of AAPL up at the beginning of the week. Similarly when investors sell or close their calls, the MM closes the long stock position as the hedge is no longer needed. this drives the stock price down on Friday. This is a pattern that can be traded.
So, AAPL is still the golden child of weekly and monthly options. I will continue to trade AAPL. But I am also looking for other stocks with large amounts of call option open interest. Maximum-pain.com has introduced a stock screener that shows exactly that. Any stock with weekly call options over 50,000 contracts is shown, indicating which stocks are more likely to be affected by max pain or poormans algorithm.