Mike Khouw's Apple Inc. Trade

On CNBC's Options Action, Mike Khouw suggested that investors with a long position in Apple Inc. AAPL should consider an options strategy that should help them to get more money back if the stock trades higher. Khouw thinks that it is not a good idea at the moment to double down and commit more capital. Instead, he wants to buy the March 97.5 call for $5.50 and sell two March 105 calls for $2.50. The trade would cost him $0.50 and it breaks even at $98. If the stock trades above $105, he would get called out of his stock and he would make $7 on a call spread. With the trade, Khouw increases his selling price for the long stock position to $112, if the stock trades to $105.