Inside Apple’s Effect On Various Tech-Focused ETFs (AAPL)

Apple’s move higher today after taking a drubbing for three straight sessions following Tim Cook’s announcement of the “IPhone X” product is interesting since the stock is currently trading above $160 into tonight’s September options expiration.

With decent open interest in options on this line, the market close today will be interesting and perhaps pivotal at least in short-term directional terms for the stock, and perhaps Techs in general. We have also seen well in-the-money call activity in QQQ (PowerShares QQQ, Expense Ratio 0.20%) involving the September 145 strikes, and the fund itself has attracted more than $1.3 billion in the trailing one month period.

Top holdings in QQQ are as follows: AAPL (12.07%), MSFT (8.42%), AMZN (6.94%), FB (5.94%), and GOOG (4.70%), with AAPL slated to next report quarterly earnings on 10/31/17.

At present levels AAPL is about 2.6% off of its 52-week high and clearly participation of the highest weighted stock in terms of market capitalization not only in the Nasdaq-100 but in the S&P 500 Index in general, helps the overall trend and path of stocks. AAPL of course weighs in at 3.87% in the SPX, the highest ranking member and more than one full percentage point ahead of the next largest component as measured by market cap, MSFT (2.70%).

One interesting observation that we can make not only in terms of AAPL, but in the overall composition of the SPX currently in terms of exposures via its market-capitalization weighted scheme, is that if you combine the market caps of the two “Alphabet” stocks GOOGL and GOOG, the top five weightings in the SPX are all categorized in the greater “Tech” sector and would appear as follows: AAPL (3.87%), MSFT (2.70%), GOOGL/GOOG (2.61%), FB (1.90%), and AMZN (1.85%).

Given the upside bias in options trading and potential bullish momentum in the NDX it makes sense also to concentrate on levered “Bull” products for increased trading interest such as the following funds: TQQQ (ProShares UltraPro QQQ, Expense Ratio 0.95%) and QLD (ProShares Ultra QQQ, Expense Ratio 0.95%).

AAPL-2017-09-15

Apple Inc. (NASDAQ:AAPL) was trading at $160.58 per share on Friday morning, up $2.30 (+1.45%). Year-to-date, AAPL has gained 40.37%, versus a 12.46% rise in the benchmark S&P 500 index during the same period.


Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.