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Apple (AAPL) will be the star of the show tonight -- either that or the goat. I don't know if I've seen more negative sentiment heading into earnings. I am looking for the $585 to $590 area on the downside and $640 on the upside. I have to say that I actually favor the upside slightly into the numbers this afternoon. I am playing this from both directions, leaning slightly heavier on the call combination volume, but also looking for a range play. I am going long the October 26 $625-$640-$650 skip strike call combinations and pairing that with long October $600-$585-$575 put combinations, also known as skip strike butterflies. The total cost here will run $5.75 to $5.90. There is the risk that AAPL will run outside of the last leg of either combination, which will result in a value of only $5.00, so it is one thing to consider. Also, I hold AAPL LEAPs, so I am comfortable giving up some of the upside there.

I am taking a small bearish play into Expedia's (EXPE) earnings via the November $50-$40 put spread for $2.70 because I see downside risk to the low $40s on this name; however, given the call action in the January expiration cycle, I want to keep the play on the small side. EXPE is hugging support, so it will need a little bit of bad news or negative interpretation to push this one through support and over a cliff....135 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.