Tony Zhang's Apple Options Trade

On CNBC's "Options Action," Tony Zhang suggested that investors should consider a bullish options strategy in Apple Inc. AAPL. He believes that the sell-off is going to be contained with the volatility we have seen over the past couple of days.

Zhang thinks Apple's chart is strong, relative to the market and to the tech sector and he thinks it has one of the strongest fundamental outlooks within the tech sector. The stock traded below its 20-day moving average, which Zhang sees as a bullish sign.

To make a bullish bet, Zhang wants to sell the October $115/$105 put spread for a credit of $4.15. The trade breaks even at $110.85 or around 8.5% below the closing price on Friday. If the stock stays above $115 at the October expiration, Zhang is going to collect the premium. If it trades to $105 or lower, the trade is going to reach its maximal loss of $5.85.

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