FORTUNE -- Travis Lewis, an independent investor who studies the Apple (AAPL) options market, has long maintained that trading in puts and calls has become the tail that wags the underlying securities' dog -- especially for Apple options, the most heavily traded derivatives by volume, and especially since trading in those options went weekly in the summer of 2010.
To test his theory, Lewis began buying and selling Apple shares using what he calls the Poorman's Algo (for "algorithm") and tracking the results.
He explained it in a June 2012 Seeking Alpha post:
"Since Apple always trades more calls than puts, the stock will have to rise as buying bias comes in. Remember... when you buy a call, the seller will buy stock to offset it. This is what brings in the buying pressure. The opposite also has to take place later in the week as you will eventually sell this call. When you sell your call, the buyer of it will sell shares of Apple... In conclusion; people buy weekly calls in the beginning of the week and sell them at the end of the week.
If this is a tradable pattern, you should be able to make money by doing the opposite: i.e., buying the stock at the close of trading Friday and selling it at Tuesday's close, and that's what he did.
Did it work?
According to Lewis, his Poorman's Algo (so-called because you don't need a PhD. to set it up) has paid off nicely for each of the last three years.
See the attached chart for the results of fiscal 2013.
See also: Apple: Even Poormen Achieve Alpha.
More funds got out of Apple than got into Apple in Q2.
FORTUNE -- Big money fled Apple (AAPL) for the second quarter in a row, according SEC filings submitted this week.
Any institution that manages more than $100 million in equities was required by Wednesday to file a form 13f telling the government what shares they bought and what they sold. Although Apple was the institutional investors' most popular holding, according MOREPhilip Elmer-DeWitt - Aug 17, 2013 1:03 PM ET
If you're looking for evidence of manipulation, Friday's close was picture-perfect
"The easiest way to think of options," wrote The Market Skeptics's Eric deCarbonnel in a prescient 2009 post, "is as a type of insurance. Investors pay a premium to protect themselves against sharp swings in the market. If these sharp swings don't happen, those selling options (option market makers) keep the premiums as profit."
"In a legitimate free market," he continues, "every MOREPhilip Elmer-DeWitt - May 15, 2011 9:32 AM ET
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