Wednesday, August 22, 2012

Recent Transaction

On Tuesday, I decided to sell another put option on Intel. This time it was a $26 September 22, 2012 Put Option for $0.48. After commission I netted a $40.01 option premium. Here's how the option can play out. 

(1) Option expires - I received $40.01 in option premium on $2,600 to cover the put, that's a return of 1.54% over 32 days which is an annual return of 17.55%.

(2) Option is executed - My cost basis for the 100 Intel shares would be $25.69 giving me a YOC of 3.50% based off the current $0.90 annual dividend. If you remember from my Intel stock analysis the calculated average fair value was $30.41 which gets me buying into Intel at a 15.50% discount.

 I'll be happy either way this option goes.  I'll get a good return on my money or get in at a solid entry price.

1 comment:

  1. It appears that I jumped the gun just a bit on selling the put option. However, I still like move because this is going to add another $90 / yr to my dividend payout with solid growth. Obviously I could have gotten in with a lower entry price but my $25.69 is still good enough with 3.50% yield.