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Kevin Kelly's Apple Options Trade

Kevin Kelly of Recon Capital Partners spoke on Bloomberg Markets about his trading idea in Apple Inc. AAPL 0.77%.

He said investors should buy the stock to collect a 2 percent dividend and they should also sell the January 110 call for $2.58 against the long position. Kelly explained that the call is going to generate around 2.4 percent, which is just under 20 percent of annualized return. He added that the premium on the call option reduces the entry price of the position and he thinks that implied volatility in Apple is elevated.

Kelly believes this strategy is a very conservative way to own a stock like Apple.

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