Putting cash to use for a one month covered call as follows:
Bought xxx shares of AAPL at $380
Sold x Dec $360 Calls for $27.2 [expires on 3rd week of Dec, which is Fri, Dec 16th; 200 day MA is $363. Hence $360 level is solid support level ]
If called (in a month, if aapl closes above $360), $27.2 is mine to keep, i.e net selling price will be $360 + $27 ==> $387; i.e, profit of 7.2
If not called (<$360), then break even is at $353. As long as it holds above this level and where it closes in the 360-353 range determines my profit.
If total meltdown and aapl closes way below $353 at say, 300. Not good and in that case I would be in for trouble with a loss of around 50 points!! :(
So question now would be will the AAPL (as well as the market) hold for a month and the bottom doesn't fall off!
Bought xxx shares of AAPL at $380
Sold x Dec $360 Calls for $27.2 [expires on 3rd week of Dec, which is Fri, Dec 16th; 200 day MA is $363. Hence $360 level is solid support level ]
If called (in a month, if aapl closes above $360), $27.2 is mine to keep, i.e net selling price will be $360 + $27 ==> $387; i.e, profit of 7.2
If not called (<$360), then break even is at $353. As long as it holds above this level and where it closes in the 360-353 range determines my profit.
If total meltdown and aapl closes way below $353 at say, 300. Not good and in that case I would be in for trouble with a loss of around 50 points!! :(
So question now would be will the AAPL (as well as the market) hold for a month and the bottom doesn't fall off!
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