AAPL Alerted At: $343.26 as of 07/1/11 – AAPL Q3 2011 EPS ESTIMATE 5.69 – Date 19-Jul-11

Strangle would possible work here, take a look at Friday's Options

Buy To Open 1 AAPL 345 JUL 11 Call Monthly at 10.55 - Delta .50 - stock has to rise above $356.40 by Aug 20.

Buy To Open 1 AAPL 340 JUL 11 Put Monthly at 11.40 - Delta .44 - stock has to fall below $329.50 by Aug 20.

A debit of 21.95 ($2195) would have been invested, commission have been excluded. This is 100% premium risk.

Straddle would possible work here, take a look at Friday's Options

Buy To Open 1 AAPL 340 JUL 11 Call Monthly at 14.10 - Delta .56 - stock has to rise above $354.10 by Aug 20.

Buy To Open 1 AAPL 340 JUL 11 Put Monthly at 10.40 - Delta .44 - stock has to fall below $329.60 by Aug 20.

A debit of 24.52 ($2452) would have been invested, commission have been excluded. This is 100% premium risk.

Now, how could this trade have gone wrong? Well, if AAPL had moved just by a few point(s), let's say 5 point(s) either up or down, if the stock stays within a range, or you get a small to no movement before expiration, then probably the winner option wouldn't have gained enough value to offset the loss of the loser option. You're out of luck!! Moreover, one thing after the earnings, once AAPL move is defined to the up or down side you can get rid of the loser option quickly in order to avoid losing more money on it. So when you play either the Straddle or Strangle you are betting on a huge move, it doesn't matter if it is up or down, you just need the stock to move abruptly, to cover your debit (invested) to make the position profitable, the more the better.