The Money Tree

Safely Generating Income in Retirement

Update – INTC

Posted by mounddweller on October 28, 2012

Fellow Traders,

I want to update you on my INTC trade.  You’ll recall as OCT expiration approached I was short 5 OCT $24 puts and 5 OCT $22 puts.  As I wrote in my previous post ( I decided if my OCT $24 puts were ITM at expiration I would accept assignment to position myself to receive the $0.225 dividend in early November.

So, I now own 500 shares of INTC at $24.  However, my net cost is $22.51 since I was able to collect $1.49 in put premiums from August through October.  The next step in executing my strategy for these shares will be to sell DEC or JAN calls at either the $23 or $24 strike.

With the OCT $22 puts I decided to roll out and down.  I bought back the OCT $22 puts for $0.34 and sold the DEC $21 for $0.54.  My plan will be to continue to roll these out and down as necessary to avoid assignment until such time as I have built up a substantial net credit.



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