Monday, 19 August 2013

Options Trade - Intel


I sold a call on my 200 shares of Intel today, because one, they did not increase the dividend, and two, I'm not all that attached to the information technology sector:

2 INTC January '14 $21 call @ $2.18 (+ $12.45 commission)

Scenario 1

The option expires worthless, and I get to keep $436 in premiums ($423.55 net of commission). This would reduce my entry price on Intel from $20.77 to $18.65.

Scenario 2

My shares get called away, and I receive $4,200 minus a commission of $53.

Profit = $4,200 - $4155 (my cost) - $53 + $423.55 = $415.55

$415.55 / $4155 = 10% return (+ roughly 4.3% in dividends) over a span of 14 months

Scenario 3

The shares get called before the call expires.

Scenario 4

I buy to close the call.

No comments:

Post a Comment