The Money Tree

Safely Generating Income in Retirement

New Trade – INTC

Posted by mounddweller on September 10, 2012

Fellow Traders,

Been awhile (again) since my last post.  Wanted to tell you a little about my latest trade today in INTC.  Today, I used the big 3% drop to sell naked puts (NP) at the next area of visible support, which in my view is at $22.  At the time of my trade INTC was trading at $23.34.  Here are the specifics of my trade:

STO 5 INTC OCT $22 puts at $0.30

This gives me a 1.36% ROIC with 40 days to expiration.

Below is a chart which shows why I think the next significant level of support is at $22.  Previously there was weaker support at $24 but with the recent downward forecast of full year revenue, this level has been broken.

My total INTC position now consists of 5 SEP puts at the $24 strike and these 5 OCT puts at the $22 strike.  My plan is to roll the SEP puts to NOV if they are ITM as expiration approaches.  If INTC bounces back above $24 after SEP expiration I will then look to buy back my OCT $22 puts.

Regards,

Troy

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5 Responses to “New Trade – INTC”

  1. Chester said

    I like this trade. I’ve got a bit going with Intel as well. Can sentiment get much worse for Intel? I feel the stock is buoyed by the 3.85% present yield. Good luck, Chester

    • mounddweller said

      Chester,

      Thanks for the comment. Enjoyed the little bounce in INTC today. Probably will have more weakness but I think $22 will hold unless the market becomes unglued.

      Regards,
      Troy

      • Chester said

        If it gets down to 22 will you sell 21’s or 20’s?? Or would you just roll the 22’s you sold? Thanks

      • mounddweller said

        Chester,

        If it gets down to $22 I’ll probably just roll them out. It really would depend on the price of INTC at the time. If > $21 I’ll roll out. If < $21 I'll roll out and down.

        Regards,
        Troy

  2. Chester said

    I think I would roll down and out for a net credit in either scenario. If possible I’d get paid to drop from 5 to 4 contracts as well. Good luck

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