Apple investors jittery on Jobs's renewed health rumors

Rumors persist about the health of Apple Inc. (NASDAQ: AAPL) CEO Steve Jobs. Gizmodo reported a rumor that his rapidly deteriorating health was the reason he canceled an appearance at next week's Macworld conference.

Sadly, his health problems are not new. According to Valleywag/Gawker, Jobs's surgery to treat his pancreatic cancer changed the flow of his digestive system, making it hard for him to digest some foods -- and Valleywag/Gawker reports that Jobs can no longer drink his favorite beverage, a nonalcoholic grape juice from California's Navarro vineyards. Oracle (NASDAQ: ORCL) CEO Larry Ellison, who is a close friend of Jobs, once broke down in tears and said, "My best friend is dying."

Investors are betting that Jobs does not have much time left. Trading in puts -- an option to sell the stock at a fixed price which is generally used to bet on a decline -- has risen. For example, volume of puts which can be exercised in January 2009 at a strike price of 80 and 85 surged to a high 10,000. Prior to 12:30 pm, those January 80 puts traded between $1.63 and $2.05, but when these rumors appeared thereafter, the puts rose to between $3.07 and $3.72 and peaked at $5.05 as volume jumped.

Are these just false rumors like the one in October about his heart attack? Apple is not shedding any light on the subject.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.