Intel Corp. (INTC)
Update 5/1/2017: intc gapped to the downside after earnings were published and on the second day of trading, as the options approached expiration, reached a point where I could exit at less than my target price, at 17.9% of maximum potential profit. (My target is 25%.)
Shares declined by 2.3% over four days, or a -213% annual rate. The options positon produced a 21.7% yield on debit for a +1,980% annual rate.
INTC publishes earnings on Thursday after the closing bell.
I shall use the series of weekly options that trade for the last time eight days hence, on May 5.
Implied volatility stands at 21%, which is double the VIX, a measure of the volatility of the S&P 500 index.
INTC’s IV stands in the 58th percentile of its annual range and the 92nd percentile of its most recent broad movement.
The price used for analysis was $37.11.
The premium is 57% of the width of the position’s wings.
The risk/reward ratio is 0.9:1.
Decision for My Account
I have opened a position on INTC as described above. The stock at the time of entry was priced at $37.10.
By Tim Bovee, Portland, Oregon, April 27, 2017