Why This Options Adviser Recommends Selling Apple Puts Until 'Catalyst' Moves The Stock

Kevin Kelly was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Recon Capital Chief Investment Officer Kevin Kelly said that Apple Inc. (NASDAQ: AAPL) would need a "catalyst" to ultimately push the stock higher. Over the past three months, Apple has been stuck in a $124 to $134 range.

Shares traded recently at $128.82, up 1.1 percent on the day.

Related to the Worldwide Developer Conference, Kelly said that this week's Apple Music announcement was well scripted and, given that iTunes already had a radio feature, it was more of a "publicity stunt." The interesting part will come if this is a "prelude" to another content announcement related to the TV.

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Kelly said that traders should consider selling Apple puts given the fact that it is a "great company" with "great leadership" and "great fundamentals." Previously, Kelly said he recommended selling a January 2016 $120 put in the stock, which would currently yield a $6 per share premium. If traders also wanted to capitalize on the upside, they could enter a risk reversal, Kelly said, and use that collected premium to purchase a call.

For the year, the stock is still outperforming the broad market, up 16.6 percent compared with gains of 7 percent in the NASDAQ 100.