We were assigned shares of Apple (AAPL) and Moderna (MRNA) last week, Today, I am recommending calls to sell against those shares to reduce our cost basis on the positions.
Apple unveiled new products at its annual iPhone event this week, including the iPhone 14, new AirPods and several new Apple Watches. There weren’t any earth-shattering product changes. Notably, though, Apple kept its iPhone prices the same despite inflation.
Following a sharp sell-off from its August high, Moderna has rallied 9% in the past two days.
Last week, the Food and Drug Administration granted emergency use authorization for Moderna’s omicron booster shots for U.S. adults. This week, health officials said COVID-19 vaccines will largely become an annual occurrence like the flu shot.
Another possible reason for the rally in shares today is that it is the company’s annual R&D Day, with Moderna announcing advances across its pipeline.
Finally, shares received an analyst upgrade this morning, with Deutsche Bank raising its rating of the stock to “buy” from “hold.”
Both AAPL and MRNA are seriously undervalued at current levels. We will target a mix of cash and potential appreciation with the calls we sell today.
AAPL Uncovered Shares
Current Stock Price: $155.75
Cost Basis: $162.97
Action: Sell to open the AAPL Sep Monthly (9/16) 160 Call for around $1.15, but adjust as needed to sell a call today
New Cost Basis: $161.82
MRNA Uncovered Shares
Current Stock Price: $140.93
Cost Basis: $172.16
Action: Sell to open the MRNA Sep Monthly (9/16) 155 Call for around $0.87, but adjust as needed to sell a call today
New Cost Basis: $171.29