Carter Worth And Mike Khouw's Apple Trade

On CNBC's "Options Action," Carter Worth spoke about Apple Inc. AAPL. He said that its behavior since January has been very poor. In March, it fell just as much as the market and it rebounded only 35%. Worth is worried about its relative performance versus PowerShares QQQ Trust, Series 1 QQQ, because it continues to stall. He sees that as a problem and he is skeptical going into the earnings.

Mike Khouw has a short position in Apple. He said that it is hard for him to be optimistic about the stock. The implied volatility remains high so Khouw wants to sell the May $260 put for $5.25 and buy the July $265 put for $15. The trading structure would cost him $9.75 and he is hoping that the stock is going to stay above $260 at the May expiration and then decline below $255.25, which is around 10% below the closing price on Friday.