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Weekly Apple (AAPL) Trade June 4
We've had success with 4 different weekly trades in Apple (AAPL) over the last 6 weeks. Today we are suggesting another 5-day AAPL weekly in-the-money covered call.
Annualized Return of 27% to 62%
Buy AAPL at 553.73 and write one of these:
| Strike | Call Bid | Net Debit | Absolute Return |
Annualized Return for 5 day trade |
|---|---|---|---|---|
| 525 | 30.70 | 523.03 | 0.38% | 27.5% |
| 530 | 26.30 | 527.43 | 0.49% | 35.6% |
| 535 | 22.15 | 531.58 | 0.64% | 47.0% |
| 540 | 18.30 | 535.43 | 0.85% | 62.3% |
If AAPL stays above the strike you choose by this Friday then your stock will be called away and you make the Annualized Return shown over a 5 day period.
If you are not assigned on Friday (i.e. AAPL is below the strike you choose) then you own AAPL at the net debit shown and can write another option for the next cycle. Your cost basis (i.e. break even point) is the Net Debit.
June 8, 2012: Post-expiration followup... AAPL closed at 580.27 on the last day of trading for the above options. All 3 strikes shown finished in the money, were called, and the Annualized Returns shown above were realized.
Mike Scanlin is the founder of Born To Sell and has been writing covered calls for a long time.