Back on 1/13/20 I bought 200 shares of Apple (AAPL) at $313.65. When I bought I also sold a $317.50 Call. This was a 4 day Call. On Friday 1/17 that Call expired and I was assigned at $317.50 making $770 on the stock and keeping the $500 premium.
On 1/21 I bought another 200 shares going into earnings. Earnings were great and AAPL went up to $327. I didn’t sell a Call then because I felt AAPL was gonna take off. This is when the fear of the coronavirus started to grow and the stock backed off with everything else.
Today with the stock at $319, and going down, I decided to sell another Call. I’m not worried about AAPL but I’m a little concerned about the market in the near term. I figured while there is uncertainty in the market let me lock in some premiums on the positions I can.
I sold 2 AAPL 2/7/20 $325 Calls for a premium of $2.50. This gives me $500 into my account. I’m in a “watch & see” mode, so if I have an opportunity to grab $500 I figured why not? If the stock goes up next week I get assigned at $325 and I bought the stock at $317.50. This will be a nice profit. I love Apple but I wouldn’t mind freeing up this money (at a profit) to trade options with. I’m still holding Apple in my Wealth Builder’s Pillar of Strength Portfolio so I will benefit if the coronavirus goes away and Apple takes off. And it will take off if the virus goes away.
Sell to Open 2 AAPL 2/7/20 $325.00 C @ $2.50 (+$500)
This is a Covered Call on the best stock in the world so it gets a Risk Factor 1.
I’m taking this time of uncertainty to get some work done in my house. I’m building a media room which will be ready for the Super Bowl. I’m gonna get to work now. The TV is hooked up so I’ll have CNBC on and I’ll have my laptop open. I’ll take a look every once in a while between making cuts on my moulding.
Successful trading,
Steve
The Options Coach