Intel Stock One Week Put Selling Into Earnings

Today’s bill sell-off  had me watching two tech stocks, Microsoft Stock and Intel Stock. I am already holding Microsoft Stock puts that will expire on Friday. I also have Intel Stock naked puts for April 20 at the $21 strike. I am holding just 10 naked puts so today I sold 5 more. Intel Stock issues its earnings tomorrow. Intel Stock meanwhile has been hanging tough all day despite the steep sell-off in the market. Let’s take a look at the intraday chart.

Intel Stock Intraday Stock Chart

Intel Stock April 15 2013

You can see that the Stock is stuck in this range as investors refuse to sell out waiting for tomorrow’s earnings. Analysts estimate earnings of around .41 cents whereas last year for the same quarter, Intel turned in .53 cents.

Intel Stock Straddle or Strangle

I like Intel Stock. I am holding a lot of puts and have not been assigned any shares yet. Today I bought back my April $24 naked puts and I sold my 500 shares which I had bought April 8. I then rolled out to October at $24. With the earnings coming out a lot of investors are turning to long straddle or strangle strategies. I am not sure what will happen with Intel Stock tomorrow but I am surprised the stock is hanging in here so well.

Intel Stock Put Selling $21 Strike

Selling 5 more of the Intel Stock naked puts at $21 makes a lot of sense to me. This brings my total naked puts to 15. If I was assigned at $21 or if I had to roll lower it will reduce the break-even of my naked puts at higher strikes as I will have more naked puts at low levels to bring down the cost of the naked puts at higher levels.

Eventually all my naked puts that are above $23.00 will be brought down in valuation simply through continuing to generate more income from using a couple of trades and from selling more puts at lower strikes. I will outline the strategy in the coming weeks as I continue to adjust my trades.

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