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How to turn your Intel shares into an income machine - even in a tough market
Options 10 minutes to read
Koen Hoorelbeke
Investment and Options Strategist
Note: This is marketing material.
How to turn your Intel shares into an income machine - even in a tough market
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.
Why focus on Intel now?
- Share price at multi-year lows: Intel trades around $21.50 per share, making it more accessible than many big tech names.
- Major company events: Recent restructuring and upcoming July earnings create uncertainty in the stock price, which increases the option premiums you can collect.
- Accessible for beginners: You only need 100 shares (about €2,000) to get started—much less than stocks like Nvidia or Apple.
What is a covered call?
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.
Step-by-step: How to sell a covered call on Intel
1. Check the stock price and long-term trend
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.
2. Select your call option
Suppose you’d be satisfied selling Intel if it rises to $24 by July 18, 2025 (about 12% higher than today).
- Sell one $24 July 18, 2025 call option
- Receive $0.34 per share (total $34 for 100 shares)
- ROI example: $34 ÷ $2,148 (current 100 shares value) ≈ 1.6% for a one-month hold. If repeated, this could annualize to ~19%, though results may vary.
3. What could happen next?
Three scenarios:
- Intel stays below $24:
- You keep your shares and the $34 premium.
- Intel rises above $24:
- You’re required to sell your shares at $24, but keep the premium. Your total sale is $24 + $0.34 per share, a gain of about 13% from the current price.
- Intel falls:
- You still own the shares. The premium slightly reduces your loss but does not eliminate downside risk.
4. What are the risks?
- You cap your upside: If Intel suddenly surges, your gain stops at the strike price plus the premium.
- You still face downside risk: If Intel drops, you lose value as with any stock investment, but the premium collected softens the blow.
- Early assignment risk: If Intel approaches the strike price just before an ex-dividend date, the option might be exercised early. This is uncommon, but worth knowing.
Is this strategy right for you?
Covered calls are best for investors who:
- Want regular income while holding a stock
- Are willing to sell shares at a set price if the stock rises
- Prefer a conservative, step-by-step approach to using options
If you never want to sell your shares, choose a higher strike price or skip selling covered calls during volatile periods.
Summary Table
| 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 |
FAQ
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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