Apple Leaps Over Tesla to Become Second Most Active Stock Option
$Apple(AAPL)$
Shares of the iPhone maker that makes most of its smartphones in China jumped as much as 7.5% to $212.94 Monday morning. While the stock has given back about half of those gains, it's still up 3.2%. The rally pushed out of the money the put options that give the holders the right to sell the stock at $200 by Thursday. Markets are closed on Friday for the Good Friday holiday.
The price of those $200 put options tumbled almost 60% as the rally boosted the odds that the contract would expire worthless in three days. More than 50,000 of those put options changed hands before noon Monday as holders unload them, making them the contract the most active option tied to Apple.
The exemption for smartphones still leaves Apple with a 20% surcharge. That "will likely be manageable' for the company, compared with a 145% levy on Chinese shipments announced by the White House before the exemptions were reported late Friday, according to Bloomberg Intelligence analysts Anurag Rana and Andrew Girard.
The analysts estimate that Apple's gross margin could take a hit of 1% to 1.7% for every 10% increase in tariffs. The company can offset that by raising prices on its services and reducing operating expenses, they wrote in a note Saturday.
Baird analyst William Power, who has an outperform rating and a $260 price target for Apple said Apple’s 2026 gross margin could reach 43.7%, assuming a flat 20% tariff on all US product sales, better than the 39.1% seen before the exemptions, Bloomberg reported.
While Evercore ISI analyst Amit Daryanani sees the exemption bringing a major relief for Apple, he said the stock will continue to face an overhang from US trade policy and that's a "key risk to monitor," according to a Bloomberg report.
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