Intel Corp. (INTC)
Update 2/15/2017: INTC declined after earnings were published and then began to rise again, albeit slowly, but sufficiently to move the price back into the zone of profitability. I exited at 24.7% of maximum potential profit.
For the lifespan of the position, shares declined by 4.4% over 20 days, or a -80% annual rate. The options position produced a 32.9% yield on debit for a +999% annual rate
INTC publishes earnings on Thursday after the closing bell.
I shall use the MAR series of options, which trades for the last time 50 days hence, on March 17.
Implied volatility stands at 24%, which is 2.2 times the VIX, a measure of the volatility of the S&P 500 index.
INTC’s IV stands in the 34th percentile of its annual range and the 52nd percentile of its most recent broad movement.
The price used for analysis was $37.61.
The premium is 61% of the width of the position’s wings.
The risk/reward ratio is 0.6:1.
Decision for My Account
I have opened a position on INTC as described above. The stock at the time of entry was priced at $37.60.
By Tim Bovee, Portland, Oregon, Jan. 26, 2017