As shown in this picture, how do I execute the strategy highlighted in yellow? I am based in the UK. enter image description here

Source: http://seekingalpha.com/article/274231-intel-dividend-champion-in-the-making (10/6/11)


The Options look like this (I clipped to show just these two).

Intel Options

You call the broker, and buy 100 shares of INTC for $2,132 and then ask to "Sell to Open" one contract of the September $23 call for $41, which is what it trades at this minute. If Intel goes to $30, That guy you sold the $41 valued option now has $700 for his money, and you just sold the stock for $2300, instead of $3000. Selling covered calls for these small amounts is no way to get rich.

  • Just curious - what does that scenario look like now that INTC is closer to $20? And what was the advice in the question trying to recommend, anyway?
    – Nicole
    Sep 7 '11 at 23:36
  • The $23 strikes are worthless, no bid, 1 cent ask. Following the above trades, the buyer owns Intel at $2132 - $43 or $2089 for 100 shares. No great deal either way. The OP read an article suggesting selling covered calls to make more money than just buying the stock. Sep 8 '11 at 0:08

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