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Here's how I plan to quickly make 317% on Apple: Trader

As the market waits for Apple to report earnings after the bell Tuesday, one trader has devised a method to cash in.

Todd Gordon of TradingAnalysis.com starts by pointing out that the tech giant is expected to rise or fall just $3.50 on earnings. Yet Apple moved more than the options market expected in the past two earnings events. For instance, when its April earnings report missed expectations, the stock fell more than 6 percent.

With such a mild move expected this time around, Gordon said Tuesday on CNBC's Trading Nation that "expectations are a little too low."

So if Apple is set to move more than expected, which direction will earnings take it?

Based on the charts, Gordon sees the stock going higher. Apple has been badly lagging its large-cap tech brethren of late, and he sees that trend tuning around.

To play for the expected move, Gordon recommends an out-of-the-money option call spread as a quick trade on Apple.

Specifically, he recommends buying the 101-strike weekly calls expiring on Friday, and selling the 102-strike calls. This trade will cost a total of 24 cents per share, and return a profit of 76 cents, or 317 percent, if Apple closes the week at $102 or above.

"It's a little bit of a gamble," Gordon granted, "but we have an attractive reward-to-risk ratio."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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