Two covered-call option contracts closed this morning and but that’s the only similarity shared by the two positions. Our Apple (AAPL) call option contract (strike:$140; expiration: 21MAY2021) was designed to earn some extra cash but, with shares trading within four percent of our strike, I set a very aggressive limit order to ensure our shares are not called away by the option execution. We netted only $9.62 on the AAPL call trade but I want these shares in the portfolio without the headache of capital gains.
The Audible audiobook version of Becoming Steve Jobs was on sale for $6 this week and I bought it immediately. Thanks to the ode to AAPL’s founder convinced me to buy shares and my only regret is not buying more. We’ve owned it since it traded between $500 and $700 (before the two, most recent- splits, ~$21.43 adjusted) in the early 2010’s (in the kids’ edu account). In our taxable account, our position was established for $23.93 per share.
Our expiring position in a Square (SQ) covered-call option contract (strike: $265; expiration: 30APR2021) was closed for $25 as the shares dove. I did roll down the position to a strike of $260, same expiration, for $39. Remember – I want to liquidate half of our SQ exposure and move the position to a tax advantaged account. SQ is trading south of $248 and I’ll continue to write expiring covered-calls on the position until it is liquidated. In the past ten days we’ve closed three SQ covered-call contracts netting a total of $191.88 ($64.63 on the most recently closed). Since March 2020 we’ve netted almost $700 on SQ covered-call contracts; despite paying $276.39, net, to close one (strike: $170; expiration: 25SEP2020) and $477.39, also net, to close another (strike: $200; expiration: 9OCT2020).
Depending on tomorrow’s price action, I may close the newly opened SQ contract and sell a longer-dated contract but I expect to let the S260 contract expire and issue another contract if shares rebound next week.