An Apple Options Trade Ahead Of Earnings

Todd Gordon of TradingAnalysis.com spoke on CNBC's "Trading Nation" about an options strategy in Apple Inc. AAPL ahead of earnings.

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The company is going to report earnings on Tuesday and Gordon believes the stock is going to be range bound. He wants to use options to make money in a such market environment. He wants to sell two August 4th, 150 puts and buy the August 155 put and the August 145 put. The options structure would cost him $1.34.

If the stock closes at $150 at the August expiration, Gordon is going to make the maximal profit for the trade of $3.66. He is going to lose money if the stock closes below $146.34 or if it trades above $153.66.