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How to get long shares of Apple at no cost—but there's a catch

Apple's fall from grace

Apple investors breathed a much needed sigh of relief Monday, as the tech giant's shares leaped higher after a $1 billion investment from Warren Buffett's Berkshire Hathaway. The news follows a tough couple of weeks for the tech giant, which has lost 10 percent of its value — or a cool $58 billion in market cap — since reporting earnings on April 26. For those looking to get long shares of Apple but may be hesitant to buy at current levels, one trader has a clever strategy to get in at no cost.

"This is a good opportunity to use options to get your money back, add leverage to an existing bet, or look out to October expiration where we know the next catalyst is, and that's the release of the iPhone 7," Dan Nathan told CNBC's "Options Action" on Friday.

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To do that, Nathan recommended a trade structure called a risk reversal. "There are three reasons why I would use a risk reversal looking at Apple right now," he said. The first being to define risk over a very wide range and period of time, the second is to seek leverage on a directional move and last is to reduce the amount of premium you pay, Nathan explained.

The specific trade that Nathan outlined was buying the October 80/100 risk reversal for even money. In this strategy Nathan bought the October 100 call for $2.50 and then to finance the call, he sold the October 80 put for $2.50, thus reducing his premium outlay to nothing. The goal is to have the Apple trade above the call he is long, or above $100 by October expiration.

Of course, there is one big catch in this strategy. By selling that put, the trader must be willing to get long Apple at that put strike price, or in this case $80. Typically, these trades will tie up a considerable amount of margin.

"I think that $80 is the floor for this stock," said the founder of RiskReversal.com. "The worst-case scenario is you get long at $80 or you get long at $100 at October expiration.