Dan Nathan's Apple Options Trade

Dan Nathan spoke on CNBC's "Options Action" about an options strategy in Apple Inc. AAPL.

He thinks it would be a good idea to set up a risk-reversal strategy. He wants to sell the August 150 put for $2.75 and use the proceeds to buy the August 195 call. If the stock trades below $150 at the August expiration, he is going to have to buy the stock. If Apple rallies more than 11 percent, above $195, at the August expiration the call is going to expire in the money.