d-October expiration date were priced at nearly $2.80. Thus, a client holding 100 shares of Apple stock—a $9,600 value—could have sold (“written,” in options parlance) an option to buy the shares and pocketed a premium of almost $2,800, for an immediate return of about 3%. If that could be repeated for a string of two-month options, the annualized return from selling these so-called covered calls would approach 18%.
Does implementing such a covered call strategy make sense as a way to provide some income for retired clients?
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