INTC
Posted by Jack Haddad on January 10, 2008 at 12:56 pm
Added 13 blocks at 22.44, and hedged the shares by writing 1300 Jan strike 25 calls at .78/contract. The stock is not only undervalued but is a victim of unjust criticism; I too familar with the games that Wall Street plays to obtain the shares cheaper for their own fat accounts. 
The return ratio of the intrinsic value of the calls is what prompted me to write them. pocketing .78/share times 130,000 shares ain’t a bad return in little over a week of option expiration.
See you all at 30.
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Hi Jack - nice trade. Quick question, would you typically also buy puts at a price below 22.44 to hedge against any potential downside? Or, since you are confident Intel will rise, are you essentially willing to accept the risk given the probability of success?
Also, any suggestions you might have regarding books on getting started in options would be great. I like the idea of writing covered calls as well as using derivatives to hedge risk.
Thanks!
ES
I don’t like buying options, be it puts or calls. When buying options, youre subject to the time value decay. So, the decay works against you as you strugle to meet your exit point. However, in writing options, You’d want the decay to occur.
I recommend Lawrance McMillan. His book “options as a strategic investment” is the best, bar none!
Thanks! I’ll give it a read!
Hey Jack, you made a typo error…
I guess you meant “See you all at 20″ instead of “See you all at 30″….
Those keyboards today, we easily make mistakes.
Andre
No, Andre. Not a mistake. But only a select few are going to add to their positions tomorrow and laugh all the way to the bank later. Look I’ve gone through this in the past. Wall Street punsihed it the same thing back in Jan of 2005 when the company reported record earnings and revenue but failed to satisfy Wall Street’s taste.