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Dan Nathan’s Options Play On Apple HDTV Spike

Apple stock hit another all-time high Tuesday after rumors of the new Apple TV spread online, and one “Fast Money” pro said there was more upside ahead.

Dan Nathan of Risk Reversal liked the idea of options.

“One of the things you can do is protecting your long stock,” he said, adding that he was buying February 460 puts.

“If you want to use options for risk-management purposes, tactically — when you think the thing’s extended — this is a good candidate to do that,” he said.

The stock, Nathan pointed out, rose more than 25 percent in the past six months.

“You could say, listen, I’m going to take my gains here, and I’m going to commit amount of premium to actually participate in any further upside,” he said. “That’s another way to do it.”

This week, wrote about a leaked Best Buy survey that asked customers about their willingness to pay $1,499 for an “Apple HDTV” with iOS, a camera, a microphone and a 42-inch screen. Best Buy later said the survey was asking about a “hypothetical” product.

Also, The Globe and Mail cited anonymous sources saying that telecoms Rogers Communications and BCE were vying for a partnership with Apple and already had the TV devices in-house.

Apple shares rose 1 percent to close at $468.83 after setting a new high of $469.75.

The other “Fast Money” pros also weighed in on Apple.

“They’re still buying calls,” options trader Mike Khouw of Cantor Fitzgerald said.

Tim Seymour of EmergingMoney.com said some caution was wise.

“I think getting into a very commoditized business is different than operating in a smartphone market,” he said. “The size of TV market much smaller, replacement cycle.”

There was a possibility that Apple could spend “a ton” on research and development for a product that might not have the desired impact, Seymour said.

Karen Finerman of Metropolitan Capital Advisors said Apple might be looking at keeping users in its ecosystem.

“I don’t think it’s so much necessarily about just the hardware and the TV,” she said. “I think it’s about capturing a slice of revenue everywhere they can.”

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Trader disclosure: On Feb. 7, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Seymour is long AAPL; Seymour is long BAC; Adami owns C; Adami owns GS; Adami owns MSFT; Adami owns AGU; Adami owns NUE; Adami owns INTC; Adami owns BTU

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