Stock Options Trading - AAPL
Lucky I did the maths before I had a big night… Everything worked out as I planned, must have had a bit to drink yesterday night/this morning. Anyways, I rolled my APPL aka Apple call options forward one month and also one strike up. In English, I leased my my stocks for one more month at a higher price. The reason why I did this is because I didn’t want to pay the brokerage of selling the stock then having to buy it back and rent them out (ie. I am comfortable with APPL and I think it will perform relatively good over the next few months) This is all part of Stock Options Trading.
Anyways, here is the numbers. You can see the related trade by Clicking Here
Buy AAPL @ $130.45 (Buy Stock)
Sell AAPL Sep $125.00 Call @ $5.30 (Rent Stock Out - Stock Options Trading)
This morning I did the following trade
Buy AAPL Sep $125.00 Call @ $18.7
Sell AAPL Oct $130.00 Call @ $15.4
What does this mean?
My effective buy price is now $143.85 (130.45 + 18.7 - 5.3)
Somebody paid me 1.55 premium (143.85 - 130) today for a right to buy my APPL stock for 130 from me some time in the next 30 days.
My breakeven price is now $128.45 (130 - 1.55)
Why did I do this?
Learning experience of rolling calls forward and up
Learning the calculation behind doing the able transaction
Learnings
Having done the able calculation, this is effectively closing out my previous trade and opening this separate transaction except I save brokerage for being exercised on the stocks and buying them back. This meant that if I had better trades on the radar, I should have let this trade naturally close and open the better trade and get a much better return… Lesson Learnt. Welcome to the world of Stock Options Trading. I hope this was a helpful experience for you
