Kevin Kelly's Apple Trade

Kevin Kelly, the managing director of Kelly & Co., spoke on Bloomberg Markets about a covered call strategy in Apple Inc. (NASDAQ: AAPL).

Kelly said people are always worried about putting new money to work in names that are hitting new highs, especially in names like Apple, which reached a new high on Tuesday. He added that one way to get a long exposure is with a covered call strategy. Kelly suggested that traders should buy the stock and sell the January 180 call for around 2 percent of the underlying. The strategy offers a potential upside of 12.50 percent and a 2 percent protection.