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Pro: Here's The Best Way To Bet Against Apple

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Pro: Here's The Best Way To Bet Against Apple
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By some reports, Apple Inc. (NASDAQ: AAPL)'s iPhone 8 debut is off to a shaky start in Asia, which is contributed to the stock's worst month since April of last — with signs pointing to more downside ahead.

Taking a look at Apple's chart shows the stock had a notable move higher from $148 per share in reaction to a strong third quarter earnings beat, Todd Gordon of TradingAnalysis.com explained during a recent CNBC "Trading Nation" segment. As such, Apple's ongoing struggles may suggest the stock is looking to retest these levels, which implies an approximate 2-percent decline from Friday's levels.

If this assumption is correct that Apple's stock is heading to $148, investors may want to consider buying the Oct. 20 weekly 152.5-strike put and simultaneously selling the Oct. 20 weekly 148-strike put, he explained. This would cost about $1.54, or around $154 per option spread.

The trade implies a maximum profit of around $296 if Apple's stock closes below $148 per share on the expiration date, Johnson added.

"If the premium we just outlaid, which is about $154 or $1.54 per spread, gets cut down in half, let's cut the trade and contain the risk," he cautioned. "Otherwise, it looks like Apple could go down and close that $148 gap."

Related Links:

Due In Stores This October, Reports Surface That Final iPhone X Production Has Not Yet Begun

Why It's Too Soon To Judge Apple's Next Product Cycle

Posted-In: iPhoneCNBC Emerging Markets Options Top Stories Markets Tech Media Best of Benzinga

 

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