The Money Tree

Safely Generating Income in Retirement

New INTC Trade

Posted by mounddweller on January 7, 2011

I executed a new INTC trade today.  I STO 5 FEB $19 puts at $0.26.  The premium (net of commissions) was $117.26.  If the puts expire worthless at expiration in February my ROIC will be 1.23% with a 45-day holding period.  This equates to an annualized return of 10.01% which is a little below my desired minimum return of 15% annualized. 

Despite the sub-par ROIC I went ahead with the trade for the following reasons:

(1) First, and foremost, I wouldn’t mind owning INTC at $18.74

(2) I have way too much capital sitting on the sidelines earning nothing.  Selling OTM INTC puts is a safe way to deploy capital and generate income.

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2 Responses to “New INTC Trade”

  1. Patrick said

    I like the trade, and yes, Intel at $18.74 how does the saying go “should-a, would-a, could-a” speaking for myself. I will check INTC puts on Monday.

  2. Rich said

    Troy,

    INTEL is a great candidate for selling puts. You should be able to get a good ROC on it. Its been in a down trend the past three weeks. Premiums may pick up some, at least you will be able to sell at the 19 or 18 strikes and get good premiums.

    Rich

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