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Weekly Apple (AAPL) Trade November 15
Our track record is 22 out of 22 successful weekly trades in Apple (AAPL) since Apr 16, 2012 (see prior blog postings).
Apple is a solid company caught in a lousy market. Currently at $528, down 177 points (25%) from it's high in September. We are suggesting an 8-day AAPL weekly in-the-money covered call to take advantage of this pullback.
Annualized Return of 43% to 57%
Buy AAPL at 528.40 and write one of these covered calls:
| Strike | Call Bid | Net Debit | Absolute Return |
Annualized Return for 8 day trade |
|---|---|---|---|---|
| 515 | 18.25 | 510.15 | 0.95% | 43.4% |
| 520 | 14.85 | 513.55 | 1.26% | 57.3% |
If AAPL stays above the strike you choose by next Friday then your stock will be called away and you make the Annualized Return shown over an 8 day period.
If you are not assigned next 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.
November 23, 2012: Post-expiration followup... AAPL closed at 571.75 on the last day of trading for the above options. The strikes shown all 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.