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Actual Covered Call on AAPL (Apple)

Posted by Daniel Iuculano on April 27, 2016 - 4:46pm


Covered Call AAPL

Below is another example of an option trade that I executed this month on Apple (AAPL)

April 14 - Sell to Open 1 contract Apple (AAPL) June 17 $120 Call @ 1.63

April 27 - Buy to Close 1 contract Apple (AAPL) June 17 $120 Call @ .05

I own stock in Apple (AAPL), so I sold a covered call 1 contract (100 shares) on April 14 - Received a premium of $163 minus commissions of $8.65

Since Apple stock price dropped significantly recently due to poor quarter's sales numbers, the contract price drop today to $.05 per share or $5.00.

Remember I received approx. $163 when I sold the contract and now paid $5.00 to close the trade before expiration. Fidelity Investments does not impose a commisssion if the trade is $0.10 or less to close the trade.

I exited the trade early since I would have had to wait until June 17 to earn the additional $5.00 ( the stock would have expired worthless).

Most likely will enter a new covered call option on Apple within the next day or so to earn yet another premium.

If you have any questions about the trade, feel free to comment.

Daniel Iuculano, AAMS CMFC

Accredited Asset Management Specialist

Chartered Mutual Fund Counselor

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