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AAPL - Long Term Perfmormance Covered Call Trade In Possibly More Rocky Times

|Includes:Apple Inc. (AAPL)

Be long AAPL - or, for someone who likes to trade Options:

Buy a leap call Jan-2016, e.g. $105 and continuously sell calls against it. Because we are just before earnings - and especially if you are bullish - stay away far enough; I sold the Sep $105 call against it (so it is effectively a calendar spread at the moment). I will keep selling calls. If AAPL rips upwards, you need to roll the call up and further out. There are 17 more months to go, so plenty of opportunity to make money if AAPL does not drop. Keep the overall position delta-positive if you are bullish AAPL. As long as your short calls have a strike at least as high as the leap call, and are not in the money, that is always the case.

There is always temptation to just buy out of the money calls, but if you do it often, the odds are just against you. That is the nature of the options game.

Of course, if one holds outright long stock, you may enjoy the ride - and in addition to the dividend you may collect option premium by selling calls against your position.

Disclosure: I am bullish AAPL via Options exactly as described.

9 Jul, 01:22 PM

(Remark : originally published as comment here - I will continue to publish updates here as things happen)

Disclosure: The author is long AAPL.

Additional disclosure: Position via Options as described

Stocks: AAPL