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Bullish Options Setup Emerges for Applied Optoelectronics

By Schaeffer's Digital Content Team | July 02, 2026, 12:00 PM

Subscribers to Schaeffer's Weekend Trader options recommendation service received this AAOI commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.

Shares of Applied Optoelectronics Inc (NASDAQ:AAOI) bounced right at the site of the March high and 250% year-to-date level. The share price found support at the 130-strike peak put for all expirations, with the front three-month contracts at the 125 strike. Max pain rolls higher through the end of July as well, making now a good time to buy calls. 

 

AAOI WT repost

AAOI’s short interest float is 14.2% and grew by 9.63% over the past two reporting periods. A reversal in price action could prompt short sellers to take profits by buying back shares. Options look affordable, too. This is per the stock’s Schaeffer's Volatility Index (SVI), which sits in the 32nd percentile of its annual range, meaning near-term option traders are pricing in relatively low volatility expectations.
 
Our recommended call option has a leverage ratio of 2.8 and will double on a 44.2% rise in the underlying equity.

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