On September 5, 2023, I bought an additional 2 shares of Amazon (NASDAQ: AMZN) stock, paying $138.50 per share for our long-term dividend stock portfolio.
Amazon.com, Inc. is an American multinational technology company focusing on e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence.
We are now holding 38 shares of AMZN in our stock portfolio. That represents about 68.5% of the total portfolio.
Using dollar-cost averaging our average cost per AMZN share is $114.51
62 shares to go once we will be able to start selling covered calls and generate extra income from AMZN stock. At the current investment speed (2 shares per month) we could get there in the next 31 months or around April 2026.
If we had 100 shares of AMZN today, we could sell October 20, 2023, covered call (45 days to expiry) with a strike price of $140, to get a $4.1 premium. In case our shares would get called away on expiry we would realize $2,959 in income from our total investment.
If our options would expire worthlessly, we would simply pocket $410, or about 3.58%, and start over by writing additional call options.
To speed things up, I have started already selling options on Amazon stock.
At the moment I'm holding 1 call option with November 17, 2023 expiry and strike price of 150
For example, with AMZN expiring at $160 (10 dollars above my strike price) I would be left with:
100*150-38*114.51-62*160=$728.62
So far, since February 6th, 2023 we have already earned about $673 from selling options on our existing position. $673 on 38 shares equals about $17.71 per share.
I hope to reach 100 shares of AMZN in the portfolio and look that at least 15 shares would be bought from the capital earned from selling options premium.
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