On March 7th, 2023, we bought an additional 2 shares of Amazon (NASDAQ: AMZN) stock, paying $94.74 per share for our Partnership Fund.
We are now holding 19 shares of AMZN in our Partnership Fund portfolio
Using dollar-cost averaging our average cost per AMZN share is $105.02
81 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 on April 6, 2023, covered call (30 days to expiry) with a strike price of $110, to get a $0.26 premium. In case our shares would get called away on expiry we would realize $524 in income from our total investment, that's a potential return of 4.98%
If our options would expire worthlessly, we would simply pocket $26 or about 0.23%, and start over by writing additional call options.
To speed speed things up, I have started selling bear call spread options on Amazon stock, see: Call Bear Spread on Amazon stock – risking $500 to make $35
A 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 earnd about $68 from selling options on our existing position. $68 on 19 shares equals to about $3.57 per share.
I hope to reach 100 shares of AMZN in portfolio and looking that at least 10 shares would be bought from the capital earned from selling options premium.
At the time of writing Amazon stock is trading under both its 50/200-day Moving average. There is a great chance Amazon could even deeper. I see support at $84, anything under would be worrying. From a technical trading perspective, there is a chance stock could break the resistance level at $95. A possible bullish run to $110 is not excluded.
We will keep observing the market until our bear call spread expiry on March 31.
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