We have not had a Top Trade on INTC since December and it's $5 cheaper now so a good time for a new one.
As I said in last week's Webinar, I expected INTC is already building foundries to help ease their supply chain issues and Samsung is now talking with them about it, which is a very good sign.
Everything I liked about INTC at $50 I like 10% more at $45 ($44.12, actually) as that's $182Bn and their "slump" last year earned $19.8Bn but this year and next more like $14.5Bn as they are spending $5Bn a year building foundries to ensure they never run out of components. Unlike most traders, I don't mind when companies invest in themselves.
INTC, by the way, has no net debt and pays a $1.46 (3.28%) dividend if you are into that sort of thing. In the LTP, we just rolled the 2024 $40 calls down to the 2024 $30 calls and now we have this:
| INTC Short Call | 2024 19-JAN 60.00 CALL [INTC @ $44.18 $-0.38] | -40 | 1/27/2022 | (598) | $-19,000 | $4.75 | $-2.39 | $0.10 | $2.36 | $-0.04 | $9,560 | 50.3% | $-9,440 | ||
| INTC Short Put | 2024 19-JAN 45.00 PUT [INTC @ $44.18 $-0.38] | -20 | 11/1/2021 | (598) | $-13,000 | $6.50 | $1.05 | $7.55 | $0.25 | $-2,100 | -16.2% | $-15,100 | |||
| INTC Long Call | 2024 19-JAN 30.00 CALL [INTC @ $44.18 $-0.38] | 40 | 5/20/2022 | (598) | $54,400 | $13.60 | $2.28 | $15.88 | $-0.18 | $9,100 | 16.7% | $63,500 |
That's not bad as a new trade but, as a new, new trade - I'd go for this:
- Sell 10 INTC 2024 $45 puts for $7.50 ($7,500)
- Buy 20 2024 $40 calls for $9.25 ($18,500)
- Sell 20 2024 $50 calls for $5 ($10,000)
That's net $1,000 on the $20,000 spread that's $8,400 in the money to start and the upside potential is $19,000 (1,900%) if INTC can scratch it's way back to $50 in the next 18 months.
