Prepare apples by washing them and removing stems. Push wooden skewers securely into stem end of each apple.
In the top of a double boiler, gently heat caramel and water until completely melted and smooth. Remove caramel from the heat and dip apples, one at a time, into melted caramel to coat.
If desired, dip apple tops into chopped peanuts while caramel is still warm. Place each apple in a cupcake paper.
Place apples in the refrigerator for a few minutes until set.