8/30/2020 Plan: We look to sell a put spread in Intel (Ticker: INTC) or a put for those that want to own INTC long term.
8/30/2020 Plan (continued):
- INTC – Sell 2 of the 25 September 47/45 put spreads for 0.26. For a short put, sell the 47.5 outright for 0.57
- Prices are as of market close 8/28/2020, actual fill and strikes may differ depending on Monday open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
8/30/2020 Commentary:
After the big drop in INTC around earnings, the name has stabilized and begun to grind higher. We posted a nice long article on the merits of INTC recently, see Cheap Chips where we covered the fundamental reasons for going long on INTC. While INTC has risen a few dollars since, that case remains strong. The put spread is placed just outside the expected move, with the put just inside the expected move. If the spread expires worthless, we’ll return about 15% on our risk (26/174 = 14.9%), a nice return.
Reach out with any questions on this or any other trade!
8/31/2020 Entry:
We sold the 47/45 put spreads for 0.24 x 2. INTC has had a decent range already and you could have done better than this fill.
9/7/2020 Update:
Our put spreads are currently down money, worth about 0.32/spread (vs. the 0.24 we received when selling them). Our short strike remains about $3 OTM, and we don’t look to make any adjustments at this point, with a little under 3 weeks to go on the trade. Implied volatility went up last week as the market dropped significantly, if/when IV comes back down and if INTC doesn’t continue to drop, this position can go from unprofitable to profitable this week.
9/14/2020 Update:
Our put spreads are now basically break even (up $1). No change at this point and we expect to see some decay this week if INTC remains flat or goes up. If the market remains volatile, we may consider taking off half the position later in the week.
9/21/2020 Update:
The put spreads are worth $0.07 and are expiring this week. Take them off at any point during the week. With INTC a bit below 50, it will take a bit for them to decay. If INTC does move down and is close to our short strike make sure to close the trade completely to avoid risk of assignment. I’ll be keeping the trade on until at least Wednesday. I’m also looking at a potential roll later in the week to the 16 Oct expiration as it looks like INTC is pretty stable at these levels. Note that earnings are the week of the 23rd and we’ll avoid that.
9/25/2020 Close:
The put spreads expired worthless, bringing in $24/spread or $48 total. Per the text update, the short leg could be taken off for only $1 to eliminate risk of assignment. After the big move down after earnings, INTC has remained stable and we took advantage of that with this trade. A great win for our members!
Reach out with any questions on this or any other trade!
