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I started this trade by selling (5) AAPL 13MAY 150 puts and I collected 1.60 credit
This is what this trade looked like 5 days after entry:
AAPL at 145.71
I am going to roll the 150 put down and out 1 week and collect a small credit.
I am still committed to take stock, I’m just improving basis by rolling down and collecting credit for it.
Order Ticket:
I now collected 1.90 credit per contract
AAPL at 137.16
I’m going to roll the short 148 put out to 03JUN expiry and collect an additional 0.80
My short put is now ITM and this position is acting as if I was long shares already. The next dividend day is sometime in AUG and I’d be willing to keep rolling this put as long as I can collect a credit (backdoor dividend) in the process.
Order Ticket:
I now collected 2.70 credit per contract
I received 0.70 credit for the roll and now total credit collected is $2.60
AAPL at 148.23
I’m going to roll the short 148 put down to 145 strike and out to 10JUN expiry. This roll produces a credit of 0.36
Order Ticket:
I now collected 2.96 credit per contract
I’m long 500 shares of AAPL at cost of 142.04
This is a covered call that is being sold. The call is covered by the shares. Premium collected will reduce the cost basis for the long stock. I’m selling a call around current cost basis.
Order Ticket:
Risk Profile:
AAPL at 148.77
I’m going to let the shares get called away and start a new WHEEL trade.
Cost of shares 139.39
If called away at 142 = $2.61 profit per share.
The takeaway here is that this trade started when AAPL was trading at 148.xx
Now it is trading around the same price level but by taking advantage of premium decay I was able to reduce cost basis and come out slightly ahead.
This is all assuming AAPL closes above 142 by the end of the day tomorrow and stock is called away.
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