Apple Stock Slides as Trump Floats 25% iPhone Tariff

Apple (AAPL) shares are down 2.3% to $196.80 following President Trump's threat of 25% tariffs on iPhones made outside the U.S. and his call for domestic production, potentially increasing prices. The stock is on track for its eighth consecutive daily decline, its longest losing streak since January 2022, with options activity surging, particularly in puts, despite historically high call/put volume ratios indicating prior bullish sentiment. AAPL has exceeded options traders' volatility expectations over the past year.

Analysis

Apple Inc. (AAPL) stock is under significant pressure, trading down 2.3% at $196.80, and is on course for its eighth consecutive daily decline—the longest such streak since January 2022—following President Trump's threat to impose 25% tariffs on iPhones manufactured outside the U.S. and his call for domestic production, a move anticipated to substantially increase device prices. The stock has gapped to its lowest level since late April and currently carries a 21.4% year-to-date deficit, though a potential support level at $190 may arrest the immediate pullback. Options market activity has notably intensified, with total volume (337,000 calls and 362,000 puts) doubling typical levels, indicating heightened investor engagement. While puts are slightly leading calls in today's session, with new positions being sold to open at the popular expiring weekly 5/23 195-strike put, Apple's 50-day call/put volume ratio of 2.36 across major exchanges (ISE, CBOE, PHLX) sits in the top percentile of annual readings, signaling that options traders had maintained an unprecedented level of bullishness over the past year. Compounding the complex outlook, Apple's Schaeffer's Volatility Scorecard (SVS) of 84 out of 100 indicates the stock has consistently exceeded option traders' volatility expectations over the last 12 months.

Key Decisions for Investors

• Investors should closely monitor developments regarding potential U.S. tariffs on iPhones and Apple's strategic response concerning its manufacturing locations, as these factors pose significant risks to production costs and consumer pricing.
• Traders should observe the $190 level as a potential near-term support for AAPL amidst the current selling pressure and increased put option activity, while also considering the historically strong bullish sentiment indicated by the 50-day call/put ratio as a contrasting longer-term signal.
• Given Apple's high Schaeffer's Volatility Scorecard, market participants should anticipate the possibility of continued price swings greater than what options markets might imply and incorporate this heightened realized volatility into their risk management and options trading strategies.