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Nice Potential Profit For A Covered Call Trade In Apple

|Includes: Apple Inc. (AAPL)

I've been following Apple Inc. (NASDAQ:AAPL) since the most recent earnings report. Even though the report was pretty good, the stock had been trading above 132, and it declined a bit, but has been pretty stable. In today's down market, I bought the stock for 129.63 and wrote a covered call expiring June 5th with the strike price of 130. I received a premium of $1.59 per share. I am hoping that AAPL closes above the $130 strike price at expiration, and I will get assigned and receive $130 per share. So, I'll make a little money on the stock plus my options premiums, so the overall transaction is pretty profitable. By making the $1.59 in option premiums and the small $0.37 profit in the stock, which makes this a 1.45% return for holding the stock a little under 2 week, which is 52.75% annualized!
Apple is a very solid stock, so this trade is less risky than most.

Disclosure: The author is long AAPL.