Dan Nathan's Apple Trade

On CNBC's "Options Action", Dan Nathan recommended a stock replacement strategy in Apple Inc. AAPL, ahead of the release of the iPhone 8.

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Instead of owning the stock, Nathan wants to buy the November 160 call, sell two November 170 calls and buy the November 180 call for a total cost of $2.

If the stock closes between $162 and 178$ at the November expiration, the trade is going to make money, and it can achieve a maximal profit of $8, if the stock closes at $170. Below $162 and above $178, the trade is going to make a loss and it can maximally lose $2.