Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Dan Nathan: How To Make Money Of Apple Inc. (AAPL) Stock?

Apple Inc. (NASDAQ:AAPL) stock price has started dropping since the start of December and it has dropped by around 9%. It has dropped around 5% just in the week that just completed. This fall in Apple Inc. (NASDAQ:AAPL) prices has prompted many to think about selling this stock. But what do the option action traders think about this stock. Option Action traders Dan Nathan, Michael Khouw and Carter Worth talked on CNBC about the ways to earn from Apple Inc. (NASDAQ:AAPL) stock.

Apple Inc (AAPL) Store, Fifth Avenue, NYC

Nathan mentioned that drop in stock prices for Apple Inc. (NASDAQ:AAPL) has reduced the option prices, but it has started increasing again.

“It’s giving an opportunity to spread these puts. When you think about it, $110 is a very big level here. I will be very surprised to see this below $100, just on its fundamental news between now and January expiration, remembering that this expiration does not catch their Q1 earnings, which are going to be probably on January 23rd. So I think you actually pay $2.20 for the $110 put, I think you sell the January $100 put for a $1. Now you have a $10 wide put spread, that’s going to give you about 9% protection for about a $1,” Nathan said.

Worth supported Nathan’s point and said that $100 lower level is very important since it gives a lot of flexibility and he added that $100 is a well-defined level.

Khouw added that it might be tempting for many to cash in when the hedges turn green, but he feels that they should give it a bit of time before cashing in, since they might miss a lot of profits by doing that. He added that hedges are anyway winning at the moment.

CNBC’s Melissa Lee questioned Nathan, if his options would change post the 1Q earnings for Apple Inc. (NASDAQ:AAPL). Nathan said that first half of the year is very important for Apple Inc. (NASDAQ:AAPL). Nathan said that Apple Inc. (NASDAQ:AAPL) has gained nearly $100 billion in market due to the new phone launches. He added that this might be boosted by accounting the last quarter of 2014 and first quarter of 2015 sales. He mentioned that Apple Inc. (NASDAQ:AAPL) has gained on an average 30% in the last 5 years, which might not happen anymore, since the market cap has gone very high now.

Disclosure: None

Warren Buffett and BillionairesFree Report: Warren Buffett and 12 Billionaires Are Crazy About These 7 Stocks

Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!