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.

Here Is How You Can Buy Protection For Apple Inc. (AAPL) Stock For Free

Apple Inc. (NASDAQ:AAPL) has done incredibly well in the last 12 – 15 months and has given huge profits to many investors during this period. But whenever a stock gives huge gain in short period, there is always a massive risk on the downside. It all depends on certain catalyst that will be driving the Apple Inc. (NASDAQ:AAPL). But there is nothing wrong in trying to buy a protection on the downside risk and it will be even better if you can buy it for free. Fast Money traders Dan Nathan and Michael Khouw discussed on CNBC about one interesting trade, which could buy this protection for Apple Inc. (NASDAQ:AAPL) stock on the downside for free.

Best iOS apps you can't get on Android

Nathan pointed out that whenever a big stock like Apple Inc. (NASDAQ:AAPL) give monster gains during short period, it could also go down rapidly when they disappoint. So he feels that buying a protection to Apple Inc. (NASDAQ:AAPL) stock for the downside risk is not a bad idea. He talked about an interesting trade which he thinks can buy that protection for free.

“[…] Its an options trade. And so you are long lets say a 100 shares of stock, you could look out to May and you can sell one of the May $140 Call  at about $2.40 and you can use the proceeds to buy one of the May $115 Put for about $2.40 and what you have done there is you have created a collar. Your stock would have gained between $127.50 upto $140, you will be called away above that, but you also have protection below $115 and you would do this trade if you think that there is a potential for a massive move to the downside over the next few months because of all these catalysts don’t pan out,” Nathan said.

But when can one decide whether to go for options play or stock replacement strategy. Khouw said that as far as Apple Inc. (NASDAQ:AAPL) is concerned, since the option premium are higher, it is always better to go with a trade that Nathan has pointed out. He said that people who are holding on to Apple Inc. (NASDAQ:AAPL) stock can do some trade like this and get some protection on the downside.

Disclosure: None

I jsut made 84% in 4 daysI Just Made 84% in 4 Days By Blindly Following This Hedge Fund

I just made 84% in 4 days by blindly imitating a hedge fund’s stock pick. I will tell you how I pulled such a huge return in such a short time but let me first explain in this FREE REPORT why following hedge funds’ stock picks is one of the smartest things you can do as an investor. We launched our quarterly newsletter 2.5 years ago and not one subscriber has, since, said “I lost money by EXACTLY following your stock picks”. The reason is simple. You can beat index funds by creating a DREAM TEAM of hedge fund managers and investing in only their best ideas. I just made 84% in 4 days by blindly imitating one of these best ideas. 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!