In the article, “Apple vs. Microsoft – One More Time”, we analyzed the Apple (AAPL)/Microsoft(MSFT) rivalry and concluded a bullish strategy for both companies might be prudent. We selected covered calls stock options for the companies and every position selected was fully profitable, in just 45 days, returning an average of +3.2% at stock options expiration in November of 2006.
We’re still bullish on Apple and Microsoft, so we will once again us PowerOptions Option Chain Tool to find potentially lucrative covered calls stock options positions for the companies for stock options expiration in January of 2007, shown below:
| JANUARY Expiring 1/20/2007 47 days left | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Strike | Call Sym |
Opt Bid |
%Dnsd. Prot |
%If Unch. |
%If Asgnd. |
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| AAPL | 80 | QAAAP | 13.1 | 14.30% | 2.30% | 2.30% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AAPL | 85 | QAAAQ | 9.3 | 10.20% | 3.60% | 3.60% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AAPL | 90 | QAAAR | 6.3 | 6.90% | 5.90% | 5.90% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AAPL | 95 | QAAAS | 4.0 | 4.40% | 4.60% | 8.80% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AAPL | 100 | QAAAT | 2.5 | 2.70% | 2.80% | 12.60% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MSFT | 29.5 | MSQAT | 0.6 | 2.10% | 2.10% | 3.40% | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As in the previous article, we found significantly more potential covered calls stock options positions with Apple than with Microsoft, and the reason is not difficult to understand as Apple’s stock price has been much more volatile than Microsoft’s stock price lately.
For Microsoft, the Option Chain Tool returned one potentially lucrative in-the-money [ITM] covered calls stock options position with a maximum potential return of 3.4% in 47 days and downside protection of 2.1%.
For Apple, the Option Chain Tool returned five potentially lucrative covered calls stock options positions with potential returns ranging from 2.3% to 12.6% (47 days) with downside protection ranging from 2.7% to 14.3%. The higher potential returns for Apple are out-of-the-money [OTM] and also exhibit smaller downside protections, and the lower potential returns for Apple are ITM but have higher downside protection. This illustrates the beauty of covered calls investing, as an investor can tailor their investments according to their own personal risk/reward profile, aggressive investors can select positions more in the OTM direction and investors seeking more safety can select positions more in the ITM direction.
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.
PowerOptions provides Internet based tools for analyzing stock options with specific search criteria and for finding potentially lucrative option income. For those seeking to execute a covered calls stock options investment strategy for their personal portfolios, PowerOptions provides an Internet based search engine for finding potentially lucrative income producing stock options positions.
PowerOptions’ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, selling naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags]AAPL, Apple Computer Inc., MSFT, Microsoft Corp., covered call investment strategy, investment strategy, iron condor, option income, poweroptions, selling naked puts, stock option trading, stock options[/tags]