Traders are expecting about a 4% pop or drop from Apple shares after earnings

Apple is set to report after the bell Tuesday, the latest tech company that could see a big post-earnings move.

While most do not expect a Facebook-style drop, the options market is still hedging its bets, said one derivatives expert.

"What about all those surprises that we have seen in tech? Could Apple be setting up for one?" Stacey Gilbert, head of derivative strategy at Susquehanna, told CNBC's "Trading Nation" on Tuesday. "The majority of flow is not setting up for a pullback here in Apple but we have seen an increase in buyers of really protective crash puts just in case Apple falls into the camp but I would say nobody is anticipating it from an options perspective."

Apple shares have pulled back alongside the rest of tech as high-profile industry leaders such as Netflix and Facebook had big swings lower after their earnings reports. Its shares have fallen nearly 2 percent since Facebook's 19 percent drop last Thursday.

The options market is not pricing in much more risk than normal this quarter, adds Gilbert. Its implied move is around 4 percent, in line with Apple's swings on a close-to-close basis over its previous four quarters.

However, Gilbert notes that upside does appear to have a limit.

"The majority of the flows are suggestive of seeing some upside, although the upside does seem to be capped. We're seeing a number of investors sell the $200 and $205 strike calls, suggesting that they're not anticipating notable upsides, no huge surprises to the upside here," she said.

Bill Baruch, president of Blue Line Futures, is upbeat heading into the report.

"I think their earnings report will be pleasant," Baruch said Tuesday on "Trading Nation." "You're going to look and see a focus more on reoccurring revenue as well as iCloud, App Store purchases, and that September guidance."

Sales of iPhones have been the most closely watched metric in recent Apple quarters, but its high-growth software and services segment is attracting greater investor attention. The segment has averaged 17 percent sales growth over the past four fiscal years.

Baruch says he is a buyer of Apple around $188 to $190. Apple closed up slightly Tuesday to $190.29.

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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.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's Closing Bell (M-F, 3PM-5PM ET). In addition, he contributes to CNBC and CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

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