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on apple what I did was I sold the $60s, why the $60s bc thats where I dont mind stealing apple, honestly $75 and lower I dont mind but for the sake of it all I went with $60. In order to purchase 100 shares at $60 my cost would be $6,000. I received $2.65 in premium so x 100 shares $265 per contract. So if god forbid apple was below $60 by this date in 2018, my purchase price would be $57.35. Would you buy apple at $57.35 today, you damn right you would mortgage your house and do so lol.

So in reality if jan 2018 rolls around and apple is $60.01 or greater I take my profit which is $265 per contract and move on to the next trade. Is that a big money trade, no not really I make 4.4% based on $265 made per $6000 risked, but in reality its higher bc the trade requires 10% margin so you make $265 per $600 risked. Thats actually a 50% cash on cash return. If apple hits $60 in 2018, theyre gonna have like $40/share in cash by then and the buyback on full tilt so by all means the SPY would have to be in full crash mode for that to occur, just my opinion but who knows maybe somehow this iphone 7 is a total flop, but I wouldnt mind bc Berkshire Hathaway just paid $109/share.

Anyways I currently typically take names i like, like apple at its levels and sell puts weekl/monthly at levels I want. Why would I pay full price for apple at $94 today when I can sell a contract and get it for $92 next week or profit. Ya get my drift? From there lets say I get apple shares at $92, I get my premium another say 50 cents a share and my basis is $91.50. I would turn around and sell say $92.50 calls for the following week and hope to get called away or profit and lower my basis.

Selling cash covered puts and covered calls every week is like getting 52 dividends a year and dictating a price you're willing to be a buyer at, its definitely a recipe for a great return on your portfolio annually. Currently im not a big fan of where the market is, there are too many macro events globally from chinese credit issues to venezuela to an election here that Im not really wanting to buy anything so im selling puts on names I like with a little more cushion to the downside.

Give me a few months out and my sold puts on googl at $600, Apple at $60, TSLA at $140, FB at $80 and Im a happy man if I can buy those there.

The puts are indeed covered by cash, ive liquidated my entire MO position after 20 years and half my PM position after the same time frame recently bc theyve run to incredible levels and yield very low % relative to the growth theyre seeing. Im holding basically just apple,facebook,google,PNQI,SBUX,V and am trying to remove some of the safer dividend names of the past like PM,MO,Mcdonalds,Coke out of my book and roll into the tech names of the future. Its riskier for sure, but I personally believe apple,facebook,google will dominate the tech world for the forseeable future.

I dont know what level you need to be but im level 4 on etrade, it allows naked puts.You have to own the stock to sell covered calls. I sell naked calls if I wanna get short, like IE you dont like Amazon but dont wanna short $700 you can sell $800 calls 6 months out and get short there if it gets there.

This post was edited on 5/18/16 at 4:26 pm