Apple reports earnings on Monday. Ever since IBM reported earnings, traders have taken tech stocks to the woodshed. I think Apple will report a blow out number and given how bad the tape has been for two days, I'll take the other side and play on the long side with the following conservative play.
I like the following Bull Put Spread:
- Buy to open Feb $190 strike puts
- Sell to open Fen $195 strike puts
The trade above will produce 26% return as long as the stock stays above $195 by Feb expiration. If it falls below $195, the whole vertical spread can be rolled over to Mar or I would love to own Apple below $195. The potential P&L chart and daily charts are attached.
Good luck!
