Jim Strugger's Tapestry Trade

MKM Holdings' Jim Strugger suggested on Bloomberg Markets that investors with a long position in Tapestry Inc (NYSE: TPR) should consider an options strategy ahead of earnings.

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The company is going to report earnings Tuesday and Strugger believes investors should be cautious ahead of the event. He thinks it would be a good idea to sell the December 44 call against a long stock position and use the proceeds to buy the December 38 put. With the trade, Strugger can maximally lose 8.39 percent in case of a decline. The trade allows him to earn 6.08 percent in case the stock moves higher.