Dan Nathan's Apple Options Trade

On CNBC's "Options Action", Dan Nathan spoke about options implied volatility in Apple Inc. AAPL ahead of earnings. The company is going to report earnings on April 30 and the options market is implying a 4.5 percent move in either direction.

The stock has moved 6 percent on average on the day following earnings, on the last four quarters. The 6-percent move doesn't include the 10-percent plunge in January. Nathan added that the stock is still around 12 percent off its highs made last year and only 49 percent of analysts rate it as a buy.

Nathan said that at the money put or call is half of the implied move or 2.25 percent, and he wants to use low implied volatility to hedge a long stock position.

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