Apple reports next week. Here's a no-cost options trade to capitalize on a possible earnings bounce

Big tech earnings reports have put investors on quite a roller coaster. Alphabet , Microsoft and Tesla have all moved higher post earnings, while Meta , Intel and IBM had opposite reactions by dropping precipitously. Inside of this recent volatility in technology, I think it is time to add to a nearly forgotten “Magnificent Seven” laggard: Apple . Apple is down 11% year to date, and I want to add exposure in a zero-cost manner ahead of its earnings release next Thursday. Investors are anticipating a year-over-year decline in both earnings and revenue for this former tech favorite, but I believe this is already priced into the stock. Although the expectation is that quarterly revenue will see a 5% drop, the iPhone maker should still drag in a remarkable $90 billion in revenue. First-quarter results for big tech have received surprisingly odd reactions thus far. Meta beat on its top and bottom lines, but investors got spooked by Zuckerberg's unexpected additional AI spend. The high-flying stock was down nearly 15% in traders' initial reaction. So even if Apple's earnings disappoint, there is a probability that investors buy up the former heavyweight tech champion of the world as it seemingly is offered at a discount. I want to use technicals in my approach to this bullish view. With a nearly oversold relative strength index reading in Apple of 42, I think there is significant support at $160 — which sits just above the 200-day moving average that has been well respected in the past three years. The trade Bullish risk reversal in Apple: Sold the May 17 expiry APPL $165 put for $2.75 Bought the May 17 expiry AAPL $175 call for $2.75 This risk reversal was established at no cost There is risk in this spread (which I am comfortable with owning more Apple 3% lower) in the event the stock moves lower as I sold a naked (cash-covered) put. However, if Apple reclaims its mojo as tech repricing persists, my upside is unlimited being long at $175. DISCLOSURES: Kilburg is long AAPL. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.