Trade Continuation: Intel (INTC) Naked Puts

On October 10, 2012 I continued the following transaction:


08/24/12   STO 5 INTC Oct 20 2012 23 Puts @.35      161.20
10/10/12   BTC 5 INTC Oct 20 2012 23 Puts @1.22   -623.79
10/10/12   STO 5 INTC Nov 17 2012 23 Puts @1.53   761.14

This is how I played the Intel tank on these puts last month. On this trade I have now brought in $298.55 in option premium. If put to me my cost basis is down to $22.40. I anticipate rolling these puts out, rolling out and reducing a contract or rolling down and out. All this will occur prior to option expiration and will only be done for a net credit.

Even though INTC has tanked I am still bringing in regular income and reducing my cost basis in the stock. Unfortunately, my margin maintenance has increased substantially and of this writing it sits at $2800.

I very recently thought Intel had bottomed but now there are rumors that Apple wants to build their own processors and not use Intel anymore. Intel is a huge multinational with a rising dividend so I'm not too worried. I will keep on: rolling, rolling, rolling...

Trade Continuation: Intel (INTC) Naked Puts

On October 10th I rolled this Intel trade as follows:

08/22/12   STO 5 INTC Oct 20 2012 24 Puts @.37        $171.18
10/10/12   BTC 5 INTC Oct 20 2012 24 Puts @2.15     -1088.79
10/10/12   STO 5 INTC Nov 17 2012 24 Puts @2.40     1196.13



It's no secret that Intel tanked...and hard. When I entered into this trade Intel was at 25.70 and it tanked to the low 21's.

I rolled these puts out a month for a net credit of $107.34. I have now brought in $278.51 in option premium. This lowers my cost basis in INTC to $23.44. As of this writing that puts me down ~.96/share. Not bad for a complete tank job! Put selling is a very valuable trading tool.

Absent unforeseen circumstances, I will roll these puts again in a couple of weeks, dropping my cost basis once more. I can roll out at the same strike with 5 contracts, roll out at the same strike lowering to 4 contracts or roll out and down. I will only do so for a net credit.

New Trade: Intel (INTC) Naked Puts

Yesterday with Intel trading down to ~$24.40 I entered into the following transaction:

09/05/2012  STO 5 INTC Oct 20 2012 22 Puts@.22    $96.16

This is a 45 day trade that is using $1350 in margin maintenance. If the puts expire worthless we will earn 7.1% or 57.6% annual return on maintenance. If put to us our yield on cost will be a whopping 4.12%.

That's 3 Intel trades I've got going for October with the 24's, 23's and now the 22's. After today's action I feel pretty good about it but if the trades go against me there appears to be ample opportunity to roll down and out for a net credit. As such, an exit strategy is in place.

New Trade: Intel (INTC) Naked Puts

On Friday before the close with Intel trading at ~24.85 I entered into the following transaction:

08/24/12   STO 5 INTC Oct 20 2012 23 Puts @.35    161.20

This is essentially a one strike down, double down of my trade of a few days ago. I was able to take advantage of weakness/fear in Intel due to the Buffett hangover and weak results from Hewlett-Packard and Dell. If put to us our yield on cost will be right under 4% and we're just one roll away from a yield on cost above 4%. I feel pretty good that a 4% yield will buoy the stock price. In addition, we have strong support at the 25 price level.

This is a 57 day which uses ~$1800 in margin maintenance. If the puts expire worthless we will earn ~8.95% or 57.3% annual return on maintenance. If the stock drops I feel confident we can roll out and/or down for a net credit. As such, an exit strategy is in place.

New Trade: Intel (INTC) Naked Puts

This afternoon with the market down ~80 points and Intel down to ~$25.70 I entered into the following transaction:

08/22/12   STO 5 INTC Oct 20 2012 24 Puts @.37   $171.18

Buffett just sold his stake in Intel. Bill Cara  just sold his stake. Fear and uncertainty is setting in for Intel. I took this opportunity to write puts a point below the 25 support level.

This is a 59 day trade which will initially take $1700 in margin maintenance. If the puts expire worthless, return on maintenance will be 10% in 59 days or 61.86% annual. If put to us our yield on cost will be 3.8%. That yield should buoy the stock absent unforeseen market conditions. In the event the stock tanks we will look to roll down and out for a net credit. As such, an exit strategy is in place.

Profitable Trade: Intel (INTC) Naked Puts

The following puts expired worthless:

07/09/12   STO 4 INTC Jul 21 2012 25 Puts @.26     90.99

We earned $90.99 in 12 days in this trade on ~$1500 in margin maintenance. This equates to a 6% return or 184% annual. The returns are so large as there was a quarterly report issued during the time of this trade.

I didn't see an opportunity I liked to roll out and/or down for a credit so I just let them expire worthless. I will look to trade INTC again should it drop under $25.

New Trade: Intel (INTC) Naked Puts

Today with INTC down to about $25.90 I entered into the following trade:

07/09/12   STO 4 INTC Jul 21 2012 25 Puts @.26     90.99

This is a 12 day trade on a stock I'd like to own long term. It will soon be a member of the Dividend Achiever family. In fact, I expect the news of a dividend raise in the near future.

If these puts expire worthless we will earn 5.3% or 161.21% annual on $1713 in margin maintenance. The returns are inflated due to an earnings release set for July 17. If the stock drops we have many options to roll out and/or down for a net credit. As such, an exit strategy is in place.

Even if the stock doesn't drop I will probably look to roll on a weekly basis, if possible. INTC has weekly options.