Apple Hedges Highlight Wary Tech Trades Before Earnings: Options
Uneasiness over a surging dollar has options traders protecting against losses in technology companies from Apple Inc. to Microsoft Corp. (MSFT) ahead of earnings announcements this week.
Demand for options that protect against future losses in shares of an exchange-traded fund tracking companies in the technology-heavy Nasdaq 100 Index rose to the highest level in more than two years relative to bullish ones, according to data compiled by Bloomberg. Anxiety over Apple shares is at the highest in seven quarters before its earnings on Tuesday.
The Standard & Poor?s 500 Index (SPX) swung by more than 1 percent on an intraday basis for 15 trading sessions through Thursday, highlighting the market?s volatility coming into one of the busiest weeks of earnings season. Options speculators are now bracing for the impact the strongest dollar in more than a decade will have on the profitability of multinational technology companies that rely heavily on exports.
?A stronger dollar is one of the main threats on the tech sector,? Pierre Mouton, who helps oversee $8 billion at Notz, Stucki & Cie. in Geneva, said in a Jan. 23 phone interview. ?There is quite a substantial amount of exposure for companies, and earnings could be affected in the short-term.?
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