It's been a great start to the year for Apple. The stock has risen 16 percent in 2015—crushing the S&P's performance. And some analysts say the Apple Watch, set to be formally launched on Monday, will serve as yet another positive catalyst for the tech giant.
But others are more skeptical. And for Dan Nathan of RiskReversal.com, since expectations around Apple have grown so heady, it might be time to seek out protection for one's shares.
"We know that there's a lot of catalysts, and we know that stocks that disappoint sometimes with high expectations can go down a lot," Nathan said Friday on CNBC's "Options Action."
Widespread "complacency" should lead traders to "consider some other strategies," Nathan said.
Nathan's preferred method for protecting one's shares is putting on an options trade known as a "collar." The strategy entails selling an upside call and buying a downside put. Since a put grants its owner the right to sell a stock for a given price and a given time, the shares will be protected below that put's level. Yet on the upside, the trader will be forced to sell Apple shares at the level of that call, even if it rises well above there.
Specifically, against a holding of the stock, Nathan suggests selling the 140-strike call for $2.40, and using the proceeds to buy the 115-strike put for $2.40. This will allow the trader to enjoy profits up to $140, and protect oneself against losses below $115, without paying out any options premium. (One note: Since each options contract controls 100 shares of the stocks, one "collar" may be put on for every 100 shares owned. Otherwise, this trade becomes a bearish strategy with the risk of large losses to the upside.)