Trading volumes in Apple have been impressive as mentions of the company have climbed up the ranks on Reddit message boards.
Investors have purchased an extraordinary number of Apple call options, derivatives contracts that pay off if its shares rise in value.
The purchases have been concentrated on soon-to-expire options contracts, which are often favoured by retail investors.
On Tuesday, the S&P 500 fell almost 2 per cent, while Apple gained more than 3 per cent without news that would serve as an apparent trigger.
But a Bloomberg News report on Thursday saying Apple had warned suppliers of weakening demand for the iPhone 13 was enough to knock the euphoria, briefly sending Apple down more than 4 per cent.
“Call options, by their nature, increase volatility because market makers have to hedge , which pushes the price up even more,” said Peng Cheng, a strategist at JPMorgan Chase.
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