November 7th Options Now Available For Intel (INTC)

The article details two options-based strategies for Intel (INTC) shares, currently trading at $33.02, offering distinct risk-reward profiles for institutional investors. Selling a cash-secured put at the $28.50 strike (14% out-of-the-money) could yield a 9.82% annualized return if it expires worthless (78% probability), or allow acquisition at an effective $28.17. Conversely, writing a covered call at the $35.00 strike (6% out-of-the-money) offers a potential 12.20% total return if the stock is called away by November 7th, or a 52.65% annualized return if it expires worthless (54% probability), leveraging INTC's elevated implied volatilities (70% for puts, 67% for calls) compared to its 60% trailing 12-month historical volatility.

Analysis

The current options market for Intel Corp (INTC), trading at $33.02, presents distinct opportunities for income generation and strategic stock acquisition, driven by elevated implied volatility. A cash-secured put strategy involving the sale of the $28.50 strike put offers a dual outcome: either acquiring shares at an effective cost basis of $28.17—a 14% discount to the current price—or generating a 9.82% annualized return on the cash commitment should the option expire worthless, an event with a stated probability of 78%. Concurrently, a covered call strategy at the $35.00 strike presents a path to a 12.20% total return if shares are called away by the November 7th expiration, or a significant 52.65% annualized yield boost from the premium if the option expires worthless, which has a 54% probability. A key factor underpinning the attractiveness of these premium-selling strategies is the spread between implied and historical volatility; the put's implied volatility of 70% and the call's 67% both stand notably above the stock's trailing twelve-month actual volatility of 60%, suggesting options are richly priced relative to recent price action.

Key Decisions for Investors

• Investors bullish on INTC but seeking a lower entry point should consider selling the $28.50 cash-secured puts to either acquire shares at a discounted effective price of $28.17 or generate a 9.82% annualized yield on collateral.
• Current INTC shareholders or those initiating a position at market prices could enhance returns by writing the $35.00 covered call, which captures elevated premium for a potential 12.20% total return or a 52.65% annualized yield boost if the stock remains below the strike.
• Given that implied volatility (67-70%) exceeds historical volatility (60%), option-selling strategies are favorable, however, investors must weigh the capped upside of a covered call against the downside risk of being assigned stock via the put strategy if INTC's price declines.