Two Paths to Collecting Passive Income With Apple: Which Strategy Fits Your Investment Style?

Building wealth through passive income strategies has become increasingly popular among investors seeking to maximize returns without constantly trading. Whether you’re holding substantial positions in individual stocks like Apple or prefer a more hands-off approach, there are multiple ways to harvest investment income. Let me share how I personally generate passive returns from my Apple holdings—and why many investors find an ETF-based alternative even more accessible.

How Concentrated Holdings Can Generate Passive Returns

My journey into income generation started with a significant Apple position. The tech giant represents my largest single holding across all accounts, comprising 27% of my Roth IRA. However, this concentration created a challenge: I wanted to reduce my Apple exposure while still maintaining the potential for growth.

Rather than simply selling shares, I discovered I could deploy call options on my position to harvest option premiums—a proven income approach that transforms idle stock holdings into cash-generating assets. With more than 100 shares, I can consistently write call options on a portion of my position. This strategy generates passive income because when I short the option, I immediately receive the option’s premium value as a credit.

The mechanics work as follows: I wrote $280 call options expiring in May. If Apple shares remain below this strike price at expiration, the option expires worthless, and I keep 100% of the premium collected. I can then write new call options, creating a repeatable income cycle. If shares climb above my strike price, I have flexibility—I can roll the option forward at an additional credit, or allow my shares to be called away. While this exposes me to the risk of shares being called at a lower-than-optimal price if Apple surges dramatically, that outcome still beats selling at current levels.

The second component of my strategy involves redirecting all option premiums into high-quality dividend-paying stocks, systematically reducing my concentration in Apple while generating layered passive income streams.

Why ETFs Provide a More Accessible Passive Income Solution

My individual stock approach, while profitable, demands constant monitoring and active management. Not every investor has the expertise or available time to learn options trading and manage ongoing positions. This reality has given rise to a new generation of ETFs designed specifically to produce passive income through options strategies.

Consider the JPMorgan Nasdaq Equity Premium Income ETF (JEPQ). This fund operates with a straightforward mandate: deliver monthly distributions while providing exposure to the Nasdaq-100 index, all with reduced volatility. The fund executes a dual-strategy approach:

The Options Overlay: Fund managers continuously write out-of-the-money call options on the Nasdaq-100 index. These option premiums are harvested monthly and distributed directly to shareholders, creating a reliable passive income stream without requiring investor involvement.

The Equity Portfolio: The fund maintains a diversified stock portfolio selected through fundamental research and data science algorithms. Apple itself ranks as the fund’s second-largest position at 6.1% of assets.

The income generation capability is substantial. Over the past 12 months, JEPQ delivered an impressive 11.3% income yield. While monthly distributions fluctuate based on prevailing options premiums, this passive income level significantly exceeds what traditional dividend stocks or bond investments typically offer. Beyond the monthly income, investors also benefit from capital appreciation—the fund has posted a 16.4% average annualized total return since inception in 2022, combining distributions and price gains. All this comes at a competitive 0.35% expense ratio.

Making the Choice: Active vs. Passive Income Generation

Both approaches offer legitimate paths to passive income, each with distinct tradeoffs. My personal options strategy requires effort but rewards hands-on investors with potentially superior income generation. I’ve completed multiple successful trades over several years, accumulating substantial premiums that justify the ongoing management demands.

However, the passive ETF approach eliminates complexity entirely. You receive the income stream automatically each month while professionals handle the options overlay. If you lack the time or inclination to master options trading, JEPQ and similar funds provide frictionless access to options-generated passive income, plus the upside potential from quality equity holdings like Apple.

The choice ultimately depends on your personal investment timeline, expertise level, and how much involvement you want in your portfolio. Both paths can effectively enhance returns through passive income—the deciding factor is which fits your investing lifestyle.

Final Thoughts

Whether you prefer the hands-on approach of writing call options on substantial stock positions or the simplified elegance of an options-focused ETF, multiple strategies exist to generate passive income from quality companies. The goal remains consistent across both methods: collect income streams, reduce portfolio concentration, and build wealth with reduced effort over time. Choose the approach that aligns with your skills and preferences, and you’ll find a rewarding path to enhanced passive income.