Covered Call Trade idea with Amazon stock (NASDAQ:AMZN) - generate up to $600/mo*
I have been eying buying Amazon stock for covered call writing for the past few years. Unfortunately, before the recent 1:20 stock split buying 100 AMZN shares was out of my league.
Once it was announced that AMZN is performing a 1:20 stock split, it was a no-brainer to me - I will buy AMZN stock.
This is not trading advice. Investments in stocks, funds, bonds, or cryptos are risk investments and you could lose some or all of your money. Do your due diligence before investing in any kind of asset.
For now, I have bought just one share (99 to go), as I’m a bit scared of the current market environment and actually I prefer buying the rest 99 shares in a reasonable time frame, say once a month, using the so-called dollar-cost averaging.
Anyhow, I decided to see at least on paper how a trade with Amazon stock could work out:
On June 13th, 2022 you could buy 100 shares of AMZN stock spending $10,248, and simultaneously sell out of the money, July 15th, 2020 expiry, covered call with a strike price of $103 for about $6.35. That gets you $635 and makes about a 6.19% return in 32 days. Break-even: $96.13