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Apple (NASDAQ: AAPL) will hit $700 by tomorrow!

That's what you could be left to believe if you depend on the options action for the stock, which is thriving due to a whirlwind of positive news events that are sending the tech giant's price to all time highs.

The Wall Street Journal notes that Apple options have traded "more than 1.26 million times, with bullish options outpacing bearish ones by a rate of 1.65 to 1." Furthermore, the daily newspaper found that the number of options contracts traded in a single day has exceeded one million at least two dozen times.

On Monday, Apple exceeded its 52-week high and its all time trading high by reaching $676 per share in after hours trading. The uptick was fueled by several developments, including a key, long-awaited decision over Apple's lawsuit charging Samsung with infringing several of its patents. A California jury found last week that Samsung had copied the iPhone and iPad in various ways and awarded Apple just over $1 billion in damages.

As Samsung's (SSNLF.PK) share prices tanked on the news, Apple wasted no time in inflicting more potential pain on the South Korea-based company. It quickly filed court papers to try and have eight Samsung products barred from being sold in the U.S. This is estimated to possibly cost another $1 billion for Samsung, but this would be in the form of sales.

There is also growing sentiment that Apple's products will take market share from Samsung products that are powered by the Google (NASDAQ: GOOG) Android operating system. Any notion that one of Apple's fiercest competitors could be crippled is music to the ears of Apple lovers and investors alike.

Armed with the reinforced belief that the lawsuit win and subsequent ban of Samsung products could put a dent in the sales of Apple's competitors, options bulls have been pouring into the market.

To give you an idea of which options were drawing the most interest, I've noted those from Monday and Tuesday of this week. Please keep in mind that these were the only days I was able to evaluate before this article was posted.

On Monday, the August call that has a strike price of $680 was the most popular, with 34,832 contracts traded on an open interest of 3,954. The next most popular option was the August call with a $700 strike price. For it, the volume traded was 25,057 with an open interest of 6,548.

Then on Tuesday, the August $675 call drew the most interest, with 27,416 contracts traded. It was followed by the August $680 call; 23,319 of those contracts were traded.

There are also a fair number of bear options traders in the market for Apple. On Tuesday, the August $675 put had a volume of 14,346, which was the most for all of the put options.

A strategy that could be used with Apple entails bullish call spreads. This means buying a call at one price and selling a call at a higher price. Think about buying calls that are in the money and then selling calls that are out of the money. Considering the August options I've noted in this story expire on Aug. 30, I thought this strategy would work because it takes into account only a moderate rise in Apple's share price by the expiration date. Remember, this story was crafted a few days before this expiration date.

This is a costlier strategy than others for trading options, but considering the high price tag for Apple stock, it's still cheaper than buying the stock outright.

The Born to Sell options site cautions that more than 75% of all options held until expiration expire worthless, which is important if you are thinking about buying or selling Apple for this week's expiration. Also, if most options expire worthless, sell them to others; you could end up making some money while they still have value.

Source: Bulls Are Feasting On Apple Options