Bought 7 blocks at 26.77, and wrote 700 Jan 25 calls at 2.11/contract for an intrinsic value of .34/share times 70,000 shares.  This means that by Jan expiration, if INTC is above 25/share, I’ll pocket .34/share and the 70,000 shares will get taken away at 25.00.  So, my net profit will be .34/share in little under 3 weeks.  This is an example of “deep in the  money” covered call option strategy, where the intention is to have the underlying shares be taken away while pocketing an intrinsic value from the calls’ premium. 

Now, suppose INTC is below 25.00/share, then I would get stuck with my underlying shares.  However, I don’t care becuase according to my advanced calculations in quantitative analysis, INTC at or below 25 would be a great core holding anyways.  At that time, I would pocket the entire Jan call remium on the 700 contracts and write the Feb strike calls.

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