Sold 1 Covered Call on Intel Corporation (NASDAQ:INTC) - Potential income return 1.83% in 2 days

On April 21, 2021, we bought 102 shares with Intel Corporation (NASDAQ:INTC) paying $62.97 per share and simultaneously sold 1 in the money covered call on it (buy/write) with a strike price of $62 which expires on April 23, 2021 (2 days).

Intel Corporation is an American multinational corporation and technology company headquartered in Santa Clara, California, in Silicon Valley.

On April 22 is awaited INTC earnings calls and stock might (will move) a lot (we hope on the upside).

Normally I wouldn’t enter a trade just a day before the earnings report, but as we are already holding some Intel stock in our dividend portfolio I thought it wouldn’t be harmful having even some more INTC stock.

That’s another reason why we bought 102, and not 100 shares… let’s say this we put our projected potential income already in this purchase. In case our 100 shares will get called away from this Friday, we will keep 2 shares for free.

Here is our trade setup:

  • BOT 102 INTC Stock 62.97 USD 

  • SLD 1 INTC APR 23 '21 62 Call Option 2.18 USD

what can happen next:

INTC is trading below our strike price of $62  at the expiry date (April 23, 2021), in this case, we keep the premium and sell more covered calls to lower our cost basis. 

In case INTC is trading above our strike price of $62, our 100 shares get called away at the strike price of $62 and we realize our max gain of $113.6 or 1.83% potential return of income in 2 days. 

Break-even: $60.79