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Intel Corporation  
About The Company
Market Cap 109.4B
Revenue (FYR) $43.6B
EPS (TTM) $2.01
Shares Out. 5.5B
Book Value $8.97
Div/Share $.84
Payout Ratio 30.5x
P/E 9.9x
Price/Sales (FYR) 2.5
P/Cash Flow (TTM) 6.8x
Operating Margin 35.45%
Debt To Capital 4.1%
Gross Profit Margin 26.28%

Intel Corporation is a semiconductor chip maker, developing advanced integrated digital technology products, primarily integrated circuits, for industries, such as computing and communications. This is probably the number 1 chip maker to own. It is the largest chip maker in the world and although driven by consumer demand, Intel has a very strong balance sheet. The Company designs and manufactures computing and communications components, such as microprocessors, chipsets, motherboards, and wireless and wired connectivity products, as well as platforms that incorporate these components. It operates in nine operating segments: PC Client Group, Data Center Group, Embedded and Communications Group, Digital Home Group, Ultra-Mobility Group, NAND Solutions Group, Wind River Software Group, Software and Services Group and Digital Health Group.

 

 

 
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Nothing presented is financial advice, trading advice or recommendations. Everything presented is the author's ideas only. The author accepts no liability for its use including errors and omissions. You alone are solely responsible for your own investing and trading. There are considerable risks involved in implementing any investment strategies and losses can be large. Trade at your own risk.

 
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INTEL STOCK - 2011
Intel Stock Symbol - INTC

ONGOING EVALUATION & TRADE - Year 2

Intel is the largest semiconductor chip maker in the world. With a market cap of over 109 billion and a great board of directors, Intel is positioning itself to continue to dominate the semiconductor industry. The put option strategy being used is to sell out of the money puts, at the money and put options in the money in order to eventually be assigned shares for income. Selling out of the money options on Intel Stock is a fairly easy trade. Volatility remains good and helps to keep option premiums high. Intel stock value is, I believe undervalued and at times if you look through the prior trades you can see that I have sold in the money puts. At $19.00, Intel stock price history shows me a very undervalued stock. $21.00 is a median average in Intel stock and a good place to sell puts. Intel's stock dividend has recently been raised by the directors to .84 cents. At $20.00 this amounts to a 4.2% dividend yield. Intel stock dividend supports higher prices in Intel Stock. For this reason the selling of in the money puts can create an opportunity for me to gain additional income as the stock grinds higher. Any move in the stock below $20.00 should be immediately met with put selling. This will be a long term trade. If assigned shares at any time, I will sell covered calls to be exercised out of the stock. Through the combination of call and put options I have set a goal of 12% on Intel Stock.

INTEL TRADES BY YEARS
VIEW INTEL-2011 TRADES
VIEW INTEL-2010 TRADES
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Should you find my strategy and ongoing evaluation of this trade of value I hope you will consider a tip for the time I spend detailing out this trade. I have set up a Paypal account for those who would like to donate. Thank you in advance. Remember, nothing on my site is financial advice. They are just my ideas and opinions. Investing is risky and losses can be large. Trade at your own risk. Read the terms of use

 

 

YEAR 1: Trade Commenced March 2010
Goal for 2010: 9% (9 months)
Strategy: Sell Naked Puts Until Assigned
 
Capital In Use At End Of 2010 25,518.50
Income Earned in 2009 (8 months) 4,518.50
Return On Capital in 2009 (8 months) 17.7%
   
   
YEAR 2: 2011
Goal for 2011: 12%
Strategy: Sell Naked Puts Until Assigned
 
Capital Currently In Use 21019.50
Income Earned in 2011  3845.50
TOTAL INCOME EARNED TO DATE  8364.00
Total Of My Own Capital Required 12655.50
Number Of Shares if assigned 1000
Share Price Valuation
(Total Capital Required/Number of shares)
12.66
TRADE COMMENCED March 10 2010
GOAL FOR 2011: 12%

STRATEGY - SELLING PUTS UNTIL ASSIGNED
* ACTIVE TRADES ARE HIGHLIGHTED IN YELLOW
   

CARRY FORWARD FROM 2010

              4518.50
Jan 7 11 20.35 Sold 10 out of the money puts Feb $19 @ .44
Comments: Today's sharp drop in Intel the world's largest chip maker was perfect to try to gain a little income, so I sold the Feb 19 out of the money put for .44. The lower bollinger was broken today so we may see more selling, but at $19.00 I know from the past that this is a good level to be in naked puts on Intel corporation stock.
    19.50   19019.50 420.50 2.21 4939.00

Jan 12 2011: On this pullback the Intel stock didn't fall below 20.00. You can see the drop on Jan 7. Since then the stock has moved to the upper bollinger but the move higher is not confirmed by MACD.

 

Jan 20 11 20.50 Sold 4 out of the money Puts Feb $20 @ .38
COMMENTS: I am sure my Jan sold puts will expire tomorrow but the sharp drop today pushed volatility up and I sold the Feb 20 naked put out of the money.
    12.00   8012.00 133.00 1.66 5072.00
Jan 21 11 20.82 Expiry: 4 Naked Puts Jan 19 expired
COMMENTS: As expected these puts expired.
              5072.00
Feb 18 11 22.21 Expiry: 10 Naked Puts Feb 19 expired; 4 Naked Puts Feb 20 expired.               5072.00

Feb 18 2011: On this pullback Intel stock didn't fall below 20.00. You can see the drop on Jan 7. Since then the stock has moved to the upper bollinger but the move higher is not confirmed by MACD. With such a fast move to the upper bollinger in just 4 sessions, the uptrend has to be considered suspect. But looking at the below chart, there are many conflicting technicals to consider. The stock has moved up like this before, as well the general overall trend is up and MACD is confirming the uptrend. I will wait a few days and then decide what strike to sell next.

At this point I am still holding Apr 20 and 22 naked puts from previous rolls. The April 22 put was at one time an in the money put but with the rise in Intel stock it has ended up out of the money.

 

Feb 23 11 21.15 Sold 10 out of the money puts 19Mar11 $19.00 @ .22     19.50   19019.50 200.50 1.05 5272.50

Feb 23 2011:

Just two sessions later and we have fallen back. There could be more downside but I will sell the $19.00 put for March which I feel is a good price point.

 

Mar 18 11 19.93 Expiry: 10 Naked Puts 19Mar11 $19.00 expired                
Mar 18 11 19.90 Sold 10 out of the money puts 16APR11 $19 @ .25     19.50   19019.50 230.50 1.21 5503.00

Mar 18 2011:

Very nice decline and now we have turned sideways. The trading range for Intel continues. With the expiry of my March puts I have sold the April 19 puts. Meanwhile I am still holding the April $22 and $20 naked puts from late last year. Both of these puts have not become in the money puts.

I will hold for a while and then roll further out in time. For the April $22 in the money puts I will also do my usual where I reduce the number of contracts being sold after I buy back the 3 April $22 Naked Puts. Remember that this is a roll out from originally 4 put contracts in October ($22) to 3 put contracts in April ($22) and now I will roll enough out to reduce my contracts to 2 in the money put contracts.

 

Apr 1 11 19.60 Sold 5 out of the money puts 21May11 $18 @ .25     13.25   9013.25 111.75 1.23 5614.75

Apr 1 2011: The great thing about selling puts is there is always opportunity somewhere. Today Intel is down again on concerns over the semi-conductor industry, and I took advantage of the move lower by selling the May $18 strike. I did just 5 naked puts as I am hoping it may move lower and I can sell another 5 puts at the same strike. The chart below shows Intel falling today and pushing the oscillator with it. However the oscillator is trending toward oversold which I think may occur if it hits 19.00 which I feel is fair value for Intel stock. The 10-20-30 moving averages strategy however is not indicating any recovery soon although the downward spike seen over the past few sessions has flattened out a bit. Meanwhile I am not closing my Apr $19 puts yet. I want to keep them open as I kind of doubt Intel can fall much through $19, if at all over the next 2 weeks. If it gets low enough I will be able to roll those 10 naked puts at $19 from April into May at the same put strike, for a great premium. Now that will be exciting!

 

Apr 4 11 19.55 Bought to close 5 in the money Naked Puts April $20 for .58     13.25     (303.25) (2.9) 5311.50
Apr 4 11 19.45 Sold 4 in the money puts May $20 for 1.10
NOTE THE REDUCTION IN NAKED PUTS FROM 5 TO 4 ON THIS ROLL
    12.00   8012.00 428.00 5.34 5739.50
Apr 4 11 19.55 Bought to close 3 in the money puts Apr $22 for 2.50     10.75     (760.75) (11.5) 4978.75
Apr 4 11 19.45 Sold 3 in the money puts $22 for 2.85
Comment: I had contemplated rolling further out and reduce the number of put contracts from 3 to 2 as per my comments above on April 1. However the roll produced better than 1% for one more month out in time.
    10.75   6610.75 844.25 12.77 5823.00

Apr 4 2011: Is It Time To Think More Aggressively About Intel? The technicals on INTEL show that the selling could continue but I believe the big drop for the time being is over. The oscillator is flat today while the stock is down again today after Friday's big fall. Looking at the stock it is probably near the bottom of its trading range but it could slip below $19.00 making the $18.00 naked put a compelling sell for May. The 10-20-30 is showing no bounce yet but also that selling has slowed for now. This lack of selling is also supported by the oscillator, momentum and MACD. Therefore I feel pretty comfortable selling the $18 strike naked puts for MAY.

 

Those who are more aggressive could consider the $19.00 strike for April as they are picking up 1% for just two weeks of exposure and if they are assigned at $19 with April options expiry, they will be eligible for the May 3 dividend of .18 cents or almost another 1%, and then sell a covered call for May at the $19 or $20 strike.

 

I already have a lot of naked puts on Intel including two sets that are in the money and which I rolled today. I plan to hold and see if Intel slips below that $19 strike. That will be my entry point to sell more $18 naked puts. Investors remain wary of Intel Stock and analysts believe that the demand for processors could be slower than expected. In particular some analysts believe that Intel's Sandy Bridge products are not stimulating demand and will prove less profitable than Intel is forecasting. But its operating cash flow is incredible with 10.9B in 2008, 11.2B in 2009 and a whopping 16.7B in 2010. That is an increase of 53% over 2008! If Intel should drift below $19.00 it will be a compelling purchase and I will be aggressively selling naked puts and will probably consider in the money put options.

 

POSITION UPDATE

With today's roll from April to May I am now holding 4 in the money May $20 naked puts, 3 May $22 in the money puts, 5 May $18 out of the money puts, 10 April $19 at the money puts

 

April 14 11 19.45 Sold 5 out of the money Puts 21Apr11 $19.00 @ .21 (expired)     13.25   9513.25 91.75 0.96 5914.75

Apr 14 2011: Here is Intel Corp Stock for today. The news in the morning of the slower PC Sales definitely hurt the tech stocks and Intel followed all of them lower. However by 9:45 AM the big selling was over and the rest of the day the stock slowly rose and closed near the highs. I sold 5 Naked puts for 21APR11 expiry at $19 strike as momentum stayed positive about half of the day and the stock showed good strength in the face of selling. Meanwhile though MACD at the close did indicate that more selling could come tomorrow. This is a 1 week trade for 1%. Should the stock fall below 19 by then I will roll further out and lower. Intel is one of those stocks that I am pleased to stay with. It is an enormous company, a world leader and it is very well managed. With a book value of $8.97 and $2.93 cash flow, I tend to view weakness in the stock as opportunity, but if you look at the 2010 trades you can see that this stock can fall below 19.00 easily should more bad news arrive. However I will be staying with Intel for a long time yet.

Apr 15 11 19.75 Expiry: 10 Naked Puts April 19 expired                
Apr 15 11 19.60 Sold 5 at the money Puts May 19 @ .38
Comments: I only did 5 naked puts to start. Intel may have a bit more downside and I want to have more capital available to sell puts again in the next week or two.
    13.25   9513.25 176.75 1.85 6091.50
Apr 18 11 19.50 Sold 15 at the money puts May $19 @ .31
COMMENTS: I just keep watching Intel and today it hit 19.50 and I just had to sell more May 21 $19 puts. At 1.5% and with all the cash I have available, it just makes sense. If the earnings are poor I can see the stock falling to perhaps 18.50 which is 5%. At 18.50 I would buy back the 19 puts and roll them out into June or July. Honestly to me, Intel is so under appreciated, but then that's what I look for - a great company that is so under priced that I can sell puts and just keep earning more income. I have a large amount of capital available from Friday's options expiry so selling 15 more naked puts here is an easy choice. In two days my other Apr 21 naked puts expire. I am convinced this is a good trade.
    25.75   28,525.75 439.25 1.53 6530.75
Apr 21 11 21.32 Expiry: 5 Naked Puts 21Apr11 $19 expired                
Apr 21 11 21.32 Bought to close 5 Naked Puts 21May11 $18 @ .02     13.25     (23.25) (0.25) 6507.50
Apr 21 11 21.32 Bought to close 20 Naked Puts 21May11 $19 @ .04     32.00     (112.00) (0.29) 6395.50
Apr 21 11 21.32 Sold puts 10 contracts 21MAY11 $21 @ .38     19.50   21019.50 360.50 1.7 6756.00
May 2 11 23.10 Bought to close 10 put contracts 21MAY11 $21 @ .11     19.50     (129.50) (0.61) 6626.50
May 20 11 23.22 May Options Expiry: 4 Naked Puts May 20 expired; 3 Naked Puts May 22 expired                

May 20 2011:  Intel has had an exceptional month since mid-April. I had been selling naked puts at the 19.00 and 20.00 strike but with this rise all my previous naked puts that were in the money puts ended up out of the money and are now expired. Intel has a terrific future and with the news from Goldman that they have advised investors to sell their shares in Intel, the resulting weakness allowed me to sell 5 naked puts and I will wait for further pullbacks to add to my position.

 

The May options expiry also shows the value of staying with a trade even when the naked puts I have sold get caught in the money. But staying ahead of expiry and continuing to roll further out, reduce the number of contracts with each subsequent roll and roll either at the same strike further out or further out and down, eventually the stock often will run up and past my naked put positions, putting those positions that were once in the money puts now out of the money puts. This was the case this month when my May $21 and $22 put strikes ended up out of the money.

May 20 11 23.18 Sold puts 5 contracts 16JUL11 $21 @ .23     13.25   10513.25 101.75 0.96 6728.25

May 31 2011:   Intel Stock has moved down from its recent high of $23.96. The announced by Goldman Sachs on May 19, advising to sell Intel commenced the downturn in the stock. The move down is obvious in the 6 month chart below. Interesting the influence brokerages have on stock. Do you think Goldman is buying at these levels? Do you think perhaps they held puts on Intel?

The move down has allowed me to sell more puts at the $21 strike at the $20 strike. I have a lot of capital which I can still place and with June options expiry just two weeks away, I am going to have a lot more capital to invest.

$21.00 is an excellent price to sell for premium. If Intel stock slips below $21.00 then I can consider the $20 strike or sell in the money put options at the $21.00 strike. I have marked the second sell point of $20.00 on the 6 month chart below. Intel throughout much of the past year flirted back and forth over the $20.00 strike making for a compelling case of selling that put.

 

Meanwhile on Friday, the stock continued to sell and came close to falling below $22.00. At this morning's open I sold more puts spreading myself out between the $20 and $21 strikes into August. The oscillator by today's close is turning back up and MACD with a divergence of just -0.05 could be signaling a move back up in Intel Stock. .

May 31 11 22.38 Sold 5 out of the money puts 20AUG11 $21 @ .56     13.25   10513.25 266.75 2.5% 6995.00
May 31 11 22.38 Sold 5 out of the money puts 20AUG11 $20 @ .32     13.25   10013.25 146.75 1.4% 7141.75
Jul 15 11 22.37 Expiry: 5 Puts 16JUL11 expired                

AUG 4 2011:   Today's stock market collapse finally caught up to the tech stocks and Intel fell right along with the market. I figured after yesterday it would happen today and I bought back my puts early in the day, so there was still a profit in both the August 20 and August 21 puts I had sold.

 

Today Intel fell 4.40% and easily sliced through the 200 day moving average. I believe a rally may be in order and I will sell naked calls on Intel. After that I think the stock could be headed to $18.00

Intel Stock Chart - August 4 2011

Aug 4 11 21.65 Bought to close 5 puts 20AUG11 $21 at .37     13.25     (198.25) (1.8) 6943.50
Aug 4 11 21.65 Bought to close 5 puts 20AUG11 $20 at .18     13.25     (103.25) (1.0) 6840.25
Sep 6 11 19.55 Sold 5 Puts 22OCT11 $16 @ .20     13.25   8013.25 86.75 1.08 6927.00
Oct 21 11 24.03 Expiry: 5 Oct $16 puts expired                
Nov 9 11 23.80 Sold 10 naked Puts 17DEC11 $21 @ .20     19.50   21019.50 180.50 0.95 7107.50
Nov 25 11 22.70 Bought 1000 shares @ $22.70     7.00   22707.00      
Nov 29 11 23.75 Sold 1000 shares @ $23.75     7.00     1036.00 4.5 8143.50
Dec 16 11 23.23 Expiry: 10 Naked Puts Dec $21 expired                
Dec 16 11 23.25 Sold 10 Naked Puts 21JAN12 $21 @ .24     19.50   21019.50 220.50 1.0 8364.00
INTEL TRADES BY YEARS
VIEW INTEL-2011 TRADES
VIEW INTEL-2010 TRADES

 

Disclaimer: There are considerable risks involved in all investment strategies. Trade at your own risk.
Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed or presented are financial advice, trading advice or recommendations. Fullyinformed.com is a private website. Everything presented and discussed are the author's ideas and opinions only.
By using this site, you agree to be bound by its terms of use. The full terms of use can be read here. If you do not agree to the terms of use, do not use this site. The author of fullyinformed.com assumes no liability for topics and ideas discussed, errors and omissions, ads and their content and external links. Any corporate insignia used are registered trademarks of their respective company or corporation and are being used for identification purposes only. All material copyrighted by FullyInformed.com. Reproduction in whole or in part prohibited. Copyright 2008

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