The news for Intel Corp was poor yesterday with the release that McAfee is planning to lay off about 7,100 employees. Hours earlier some analysts had cut their earnings outlook for Intel Stock and continue to point to the narrowing of pricing on some of the chips that Intel makes as they feel that the buyers for these products will demand lower prices which means margins for Intel Products squeezing earnings. They could be right but I like Intel Stock so with the decline today I rolled some puts.
Intel Stock 5 Year Chart
With the downgrades by so many analysts and with the pressure on Intel stock I rolled my in the money options for Oct today. This was done to reduce the number of put contracts I am exposed to and at the same time to capture some of the higher premiums for the farther out put options. I believe at $21.90 where I rolled my puts, Intel sits in long-term support. The Intel Stock chart below is for the last 5 years. $21.90 sits among good support even before the market collapse in the fall of 2008. Once the panic ended, Intel Stock had pushed back to $21.00 by the fall of 2009.
The 5 year chart on Intel Stock from Oct 2007 to Oct 2012
Intel Stock and Rolling In The Money Put Options
Here are the Intel Stock puts I rolled this morning with Intel Stock at around $21.90.
10 Oct $25 bought $3.05 rolled to 9 Jan $25 $3.50 – reduced 1 put contract – freed $2500.00
10 Oct $24 bought $2.10 rolled to 8 April $24 $3.10 – reduced 2 puts contracts – freed $4800.00
10 Oct $23 bought $1.20 rolled to 8 Dec $23 $1.70 – reduced 2 put contracts – freed $4600.00
Retained 5 Oct 22 put contracts. I may accept assignment of these if the stock stays below $22.00 and then pick up the November dividend and sell in the money covered calls.
Available capital freed = $11,900.00
Intel Stock Rolling In The Money Put Options Summary of Today’s Trade
I will use this to sell puts at lower strikes should Intel Stock continue to decline.
Intel Stock Goals and Objectives Of The Continuing Trade
The overall objective remains the same. Roll puts and reduce the number of contracts. Always roll for a credit when possible. Use the freed up capital to sell further out of the money naked puts to slowly work the positions lower in Intel Stock over time. Continue to add to the profits of the trades going forward. Eventually accept shares and sell covered calls to be exercised out of the shares. When selling covered calls, make sure I am selling beyond dividend dates to try to capture the dividend.
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