Apple Options Worth Every Penny

These AAPL calls could double by April.
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By Michael Shulman of InvestorPlace

NEW YORK (

TheStreet

) -- Many traders prefer "cheap" options even though the real value of the option is related to the price and expected movement of the stock over time. For this reason, many otherwise intelligent and successful traders avoid "high price" calls and puts even though they represent great value and opportunity. The best example of this is

Apple

(AAPL) - Get Report

options.

AAPL crossed the $300 mark for the first time on Thursday, and by Friday's close was almost at $315. This is a high-price stock indeed, but being expensive and being overpriced are two different things. And if you believe Apple shares still have another $100 to run before the end of 2011, as

JPMorgan

analysts estimate, well, then AAPL is still a good buy.

The company is about as close to bulletproof as you can get. It has more cash than the

Fed

. It makes superior products that people are willing to pay for, giving it the best margins in the hardware business.

It is growing market share by the minute, and not just among tech-hungry consumers. Many businesses are also getting on the Apple bandwagon. Our proprietary ChangeWave Research surveys show the iPad is even taking root in the corporate marketplace, and should top 11% penetration by the end of the year (which will be a surprise to the Street).

How many growth stocks can you name -- real growth, not 5% growth -- that still have relatively small market share and incredible room to run in targeted markets?

But all of this comes at a price. A $300 stock is enough to give most investors pause. However, even at 23 times current earnings, and likely 15-17 times next year's earnings, based on growth and historical multiples, the stock is trading near record lows.

Apple's going price isn't just hard for stock investors to swallow. This expensive stock also has expensive options. Personally, I like the

AAPL April 350 Calls

, now selling north of $16.

For options traders who are used to paying only a few cents or a few bucks for their trades, this may seem too rich. After all, isn't the allure of options the ability to make outsized gains without tying up a bunch of capital? While that's true, isn't a $16 call that goes to $32 the same as a 20-cent option that goes to 40 cents? What's more, as with most things in life, you usually get what you pay for. Cheap options are often cheap for a reason.

So if you want to profit from Apple's bull market into next year, loosen the purse strings and fork over the 16 bucks. Hey, it's a heck of a lot cheaper than $300-plus for the stock.

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