Apple Inc. (NASDAQ: AAPL) shares are trading higher with the broader market after the Federal Reserve announced that it will make $200 billion worth of Treasury securities to financial institutions in an effort to increase liquidity, combat the global credit crisis, and stave off a recession. that, combined with a survey released that dawn showing that economists believe the economy will avoid a recession, has investors enthusiastic about AAPL. whether you think that the company won’t fall by too much in the coming months, thereupon now could be a good day to look at a bullish hedged trade on AAPL.

After hitting a one-year low of $87.92 final March, the stock hit a one-year high of $202.96 in December. AAPL opened that at $123.72. So far nowadays the stock has hit a low of $122.00 and a high of $125.00. As of 12:20, AAPL is trading at $123.61, up $3.92 (3.3%).

The chart for AAPL looks bearish and regular, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on that stock, I would consider an April bull-put credit spread below the $95 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For that specific trade, we will invent a 9.6% return in just one and a half months as towering as AAPL is above $95 at April expiration. Apple would have to fall by more than 22% before we would start to lose money.

Continue reading Apple (AAPL) gets a boost from Fed, recession survey

Original post by Brent Archer

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