Apple (NASDAQ:AAPL) has thrilled many and is now breaking the hearts of many who bought the stock well into the later stages of its joy ride to north of $700.  The stock is testing $420, what many see as a critical support level for the shares.

What to do now?

I am a true believer, having ridden the shares, and I’m now selling them with a new cost basis of around $620. Yup, in my personal account. How am I getting a cost basis of around $620 a share on a stock trading around $430? I’m selling (writing) calls – and I think you should do the same if you own AAPL shares and, if not, write some puts.

The trading range for now is $420 to $440 – famous last words, right? – and given recent movements in the shares, I would sell weekly options. Every week. It is imperative you stay nimble.

Today, if you sell to open the AAPL $420 March 8th expiration Put and it expires worthless, your annualized return is almost 21%.

If you sell the put, remember you must be willing to own the shares at that price. You can always roll into another date if the stock turns around, but you must be willing to own the shares at the strike price if you sell a put.

Also if you own less than 100 shares of AAPL, wait until March 18 when mini options on AAPL become available. These require just ten shares, or the equivalent capital, to write a call or put against.