Dan Nathan's Apple (AAPL) Trade

On CNBC's Options Action, Dan Nathan said that it is hard to find a reason to invest in Apple AAPL at $315. He believes that you have to be crazy to go out and buy it at this level. Apple (AAPL) could still go up 10% after the earnings, just like Google (GOOG) did. But Dan Nathan doesn't like risk reward relationship for a long position in Apple (AAPL), because the good news is already in the stock price. If you want to be involved in Apple (AAPL) ahead of earnings, he suggested an options strategy that involves a risk reversal. Specifically, he wants to sell the November 290 put for $5.20, and also the November 340 call for $6.60, and use the proceeds to buy the November 320 call for $12.80. This trading structure would cost him $1, and if Apple (AAPL) moves above $340 the call spread that he paid $6.20 will be worth $19. Apple Inc. (AAPL) gained 4.11% on Friday, and closed at $314.74.