8 May, 2023 seen 29At the end of April 2023, I was managing 3 small investment portfolios. The total value of all portfolios combined was…
On November 18, 2022, we bought an additional 1 share of Amazon (NASDAQ: AMZN) stock, paying $93.57 per share for our Partnership Fund.
We are now holding 11 shares of AMZN in our Partnership Fund portfolio
Using dollar-cost averaging our average cost per AMZN share is $110.52
89 shares to go once we will be able to start selling covered calls and generate extra income from AMZN stock. We are looking to get there by April / May 2023 using a margin account.
If we had 100 shares of AMZN today, we could sell December 16, 2022, covered call (28 days to expiry) with a strike price of $125, to get a $0.13 premium. In case our shares would get called away on expiry we would realize $1,461 in income in about 28 days, that's a potential return of 13.21%
If our options would expire worthlessly, we would pocket $13 or about 0.11% potential return in about 28 days, and start over by writing additional call options.
We could choose a lower strike price, say $120 or $105, I would maybe agree on a $115 strike price, as I wouldn't like to go with a strike price under our break-even price ($110).
With a strike price of $115, we would get a $0.31 premium. In case our shares would get called away on expiry we would realize $479 in income in about 28 days, that's a potential return of 4.3%
About Amazon inc
Amazon.com, Inc. is an American multinational technology company that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. It has been referred to as "one of the most influential economic and cultural forces in the world", and is one of the world's most valuable brands