Investment and Options Strategist
Are you a long-term investor with Intel (INTC) shares, waiting for the company to recover? Did you know you can earn extra income on those shares without selling them? Let’s walk through a straightforward strategy called the covered call—using Intel’s current situation as a real-world example.
If you own at least 100 shares of Intel, a covered call means:
You agree to sell your shares at a set price (“strike price”) if Intel rises above it by a certain date. In return, you collect an upfront payment (the “premium”).
You keep your shares and the premium if Intel stays below the strike price. If it goes higher, your shares are sold at your chosen price.
Intel’s shares are trading at $21.48, after a significant decline. For patient investors, this means higher option premiums, and it’s affordable to own 100 shares.
Suppose you’d be satisfied selling Intel if it rises to $24 by July 18, 2025 (about 12% higher than today).
Covered calls are best for investors who:
If you never want to sell your shares, choose a higher strike price or skip selling covered calls during volatile periods.
| Scenario | What Happens | What You Receive |
|---|---|---|
| Intel < $24 | Keep shares + premium | $34 premium |
| Intel > $24 | Sell shares at $24 + keep premium | $2,400 + $34 |
| Intel falls below $21.48 | Keep shares; premium cushions loss | Value of shares + $34 |
Q: What if I don’t want to sell my shares?
A: Pick a higher strike price, or don’t sell covered calls during times when you expect a big rally.
Q: What happens if the option expires?
A: If Intel is below $24 at expiry, you keep the shares and the premium.
Q: How risky is this?
A: The main risk is Intel dropping in value, just like owning the stock. The premium collected slightly reduces your loss.
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