This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

How to Turn Apple's Stock Into an Income Stream

At the end of the day, I can always get my shares back. In the AAPL example, I now have at least $60,990 sitting in my account. When my shares got called away, I sold them for $600. On one covered call, that's 60 grand. If my cost basis on AAPL was $500, I turned a 22% profit on the trade, which equates to $10,990 in real dollars before transaction costs.

I could put that money to work and buy AAPL back on the spot. I could wait for the inevitable pullback and buy on weakness. Or, even better, I could turn around and sell an AAPL put, which obligates me to purchase AAPL at the strike price of the contract in the event I get assigned. This represents another way to generate income. As with a short call, when you go short a put, you collect the premium on the option as a credit in your account.

You have some control over whether you get assigned. Plus, you can set your strike price on the basis of your sentiment. If you expect a pullback, go for an OTM put. If you expect some strength, go ITM, which will also bring in more income. There are many ways to go about this type of trade.

Later in the week, I will discuss the ins and outs of selecting a strike when you sell a put in an attempt to get long a stock.
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $125.42 0.72%
FB $85.76 -0.04%
GOOG $520.51 -0.19%
TSLA $268.26 2.38%
YHOO $39.29 0.98%

Markets

DOW 17,619.51 +23.16 0.13%
S&P 500 2,063.12 +5.48 0.27%
NASDAQ 4,986.8670 +28.3990 0.57%

Free Reports