Latest Stock Buy: Bought 2 AMZN shares at $102.63

Updated: 6 April, 2023 seen 25

On April 3, 2023, we bought an additional 2 shares of Amazon (NASDAQ: AMZN) stock, paying $102.63 per share for our Partnership Fund.

We are now holding 21 shares of AMZN in our Partnership Fund portfolio

Using dollar-cost averaging our average cost per AMZN share is $104.84 (-0.18)

79 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 40 months or around July 2026. 

If we had 100 shares of AMZN today, we could sell May 5th, 2023, covered call (32 days to expiry) with a strike price of $115, to get a $1.25 premium. In case our shares would get called away on expiry we would realize $1,141 in income from our total investment, that's a potential return of 10.88%

If our options would expire worthlessly, we would simply pocket $125 or about 1.11%, and start over by writing additional call options.

To speed things up, I have started selling bear call spread options on Amazon stock, see: Call Bear Spread on Amazon stock – risking $120 to make $25

call bear spread is an options trading strategy that involves selling a call option with a lower strike price and simultaneously buying a call option with a higher strike price on the same underlying asset.

So far we have already earned about $167 from selling options on our existing position. $167 on 21 shares equals about $7.95 per share. 

I hope to reach 100 shares of AMZN in the portfolio and look that at least 10 shares would be bought from the capital earned from selling options premium.

Amazon stock 50/200-day moving averages
Amazon stock 50/200-day moving averages

At the time of writing Amazon stock is trading in between 50/200-day Moving averages. There is a planned Earnings call on April 21, 2023, which is awaited as a binary event, the stock price either will go up or will go down. From a technical trading perspective, there is a chance stock could break the resistance level at $107. Support at $98.

We will keep observing the market for the earnings call. 

Interested to learn more about our covered call trades? Sign up for the newsletter at coveredcalls.reinisfischer.com

 

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