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Established New Covered Call on INTC; Potential Income return 1.51% in 22 days
On August 26, 2022, I got assigned 100 shares with INTC stock at the price of $35 per share. I originally opened this trade on August 11, 2022 as a Credit spread (35/33.5).
As the stock market headed into a losing week, so did INTC stock fall under my strike price and I was left either to roll out or take the assignment. I decided on the second.
Intel Corporation, commonly known as Intel, is an American multinational corporation and technology company headquartered in Santa Clara, California.
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With INTC trading below today’s expiry strike price of $35, I decided to take this assignment and buy 100 shares at 35 and sell a covered call with next Friday’s expiry
here is the trade setup:
SLD 1 INTC Sep02'22 35 CALL 0.25 USD
For this trade, I got $25 (before commissions)
What happens next?
On the expiry date, September 02, 2022, INTC is trading at under $35 per share - options expire worthlessly and I keep premium and start over - if INTC trades above $35 on the expiry date, my 100 shares will get called away and I will realize a profit of $53 ($0 value gain and +$53 options premium) or potential income of +1.51% in 22 days
Break-even price: $35-$0.53= $34.73
Running Total 4 Trades since August 11, 2022
Options income: $53
Value gain: $0