Dan Nathan's Apple Inc. Hedge

Dan Nathan suggested on

a hedging strategy in

for investors who are concerned that the stock could decline after the earnings. Nathan would sell the March 110 call for $1.35 and he would use the collected premium to buy the March 90 put for $1.35. With the trade, Nathan capped the upside at $110, which is, in his opinion, a significant resistance, because the stock broke down below that price level in August and in December. Below $90, the trade offers protection. Nathan believes that

could drop to low to mid $80s.