Apple has cruised past a minor Hidden Pivot at 280.86 that I flagged here earlier, clearing the way to the 315.32 target noted at that time. This is a major target, for sure, but I hardly think it will spell the end for Apple — perhaps merely a brief stay in purgatory while the stock consolidates for yet another spectacular run.  This is a portfolio stock, and the company will continue to make money — lots of it, especially with iTunes — no matter how bad the economy gets.  Let’s try to leverage the expected move to 315 by putting on the November 300-310-320 butterfly spread.

This trade is suggested for experienced traders only, since it might not be easy to leg into the position at the kind of prices I have in mind. Ideally, we’ll want to short two November 310 calls, buy a single 300 call and a single 320 call, all for “even.” This means that the price you pay for the 300 and the 320 call will be exactly offset by the proceeds from the short sale of the two calls at the middle strike (i.e., the Nov 310s).  If you put on the position for “even,” your theoretical loss would be zero, but you would have a maximum possible theoretical gain of $1000 if the stock settles at 310 when the calls expire on November 19. $750 of that would come from the proceeds from the short sale of the Nov 310 calls, which closed yesterday at 3.75; and the remaining $250 would come from a closing sale of the Nov 300 call — worth $1000 at that point — less the loss on the 320 call, which would expire worthless.

One way to leg into this three-sided position is to begin by shorting two Nov 310 calls when the stock hits a Hidden Pivot rally target. But that would leave you naked-short two calls, so I’ll suggest instead that we try to buy the 300-310 call spread when the stock hits a retracement low; or alternatively, to short a 310-320 spread when AAPL hits a rally target. In either case we would be putting on half the position, with long risk in the former and short risk in the latter.  Rather than subjecting you to the myriad possibilities implied here, I will track the stock intraday and signal when it’s time to act. Otherwise, we could find ourselves waiting till AAPL hits its nearest rally target, 296.08, before we act.  Stay tuned to the chat room for timely instructions.  _______ UPDATE (2:12 p.m. EDT): A gap-up opening this morning has made legging into the butterfly difficult for the time being. Our strategy will be easier and more fun to implement if AAPL is falling — assuming it ever does.