Inside My Unique Passive Income Strategy on Apple (And How You Can Easily Mimic it With This ETF)

2 months ago 14

Matt DiLallo, The Motley Fool

Sat, January 31, 2026 astatine 7:28 AM CST 5 min read

I person owned Apple (NASDAQ: AAPL) for galore years. The tech titan has grown into my apical holding. While my Apple presumption is lone 4% of my full concern portfolio, it's a whopping 27% of my ROTH IRA. I'd similar to little my vulnerability successful that account.

However, alternatively of selling immoderate of my Apple stock, I'm utilizing it to marque passive income done a unsocial strategy. Here's a look astatine my commercialized and however you tin much easy mimic this income strategy done a passive concern successful an exchange-traded fund (ETF).

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A manus showing the backmost of an Apple iPhone.

I ain much than 100 shares of Apple. That allows maine to merchantability call options connected a information of my shares. This strategy generates income due to the fact that I person the option's worth (premium) arsenic a recognition erstwhile I short it. This commercialized has a fewer imaginable outcomes:

If shares are beneath the onslaught terms of my enactment astatine expiration (I wrote $280 calls that expire successful May), it volition expire worthless, enabling maine to support 100% of the income. I tin past constitute caller telephone options.
If shares are supra my onslaught terms arsenic expiration approaches, I tin rotation the enactment forward, often astatine a credit, to make further enactment premium income. Alternatively, I tin fto my shares get called distant if I don't privation to proceed holding them.

The main hazard of this commercialized is that Apple's banal terms soars good past my onslaught terms and my shares get called away. However, it's a trade-off I'm consenting to make, since it would inactive beryllium a amended result than selling astatine the existent little stock price.

The 2nd portion of my strategy is to reinvest the options income generated by this commercialized into different stocks, thereby reducing my vulnerability to Apple successful this account. I person been investing the options income successful high-quality dividend-paying stocks due to the fact that they supply maine with passive income that I tin reinvest to trim my vulnerability to Apple.

My Apple options commercialized is precise repeatable. I've already completed respective palmy trades implicit the past fewer years, generating important income. While it's not arsenic passive arsenic different income strategies -- specified arsenic investing successful dividend stocks oregon ETFs -- since I person to actively show and negociate the options, the income I'm generating has made the other effort worthy it to me.

However, not everyone has the clip to larn options trading oregon negociate their positions. That's wherever ETFs tin help. Several ETFs person strategies designed to make options premium income.