OT OT Hi Techhooper, RE: "but I can't put any of them into play until I survive this debactle."
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I promised I would post you a reply (and I'm doing so on the Thread, instead of by PM, because my sense is there are several folks in a similar situation).
I asked a friend who seems good at covered calls, what he would do if he were in your shoes. This isn't advice, because it is specific to what he would do, which may not fit you. It's also not advice about INTC, just his personal thoughts on the generic question (pertaining to any stock), "what would you do if you still had margin on a stock that you had received margin calls on?"
If I understand him correctly, he said he would do this:
Write covered calls (cc), Jan 2002, strike $45 (or the purchase price), for a premium of $6 or $7. Even if Intel goes to $45, $6 premium is approximately 15% over 2 years, which he felt wasn't too bad given your situation of zero tolerance to a downside. He said you can't keep your upside open and have zero tolerance to a downside. Because you've had a margin call and because you have zero tolerance to a downside, you could be in trouble, so you may not have a choice to limit your downside.
Again, his thoughts are what he would do himself. They may not be appropriate for your situation.
Btw, I wouldn't do what he would do because I just don't believe in margin, which is why I couldn't give you any opinion that would help you out for your personal situation. My thoughts on this matter may not be a fit for you because I'm pretty extreme this way. I would do (at a minimum) what GV Tucker suggested you do, or, taking it a step further, completely get out of margin because I'm even more conservative than GV Tucker in this regards, if you can imagine that. It has nothing to do with my belief in Intel. As you know, I'm incredibly pro-INTC. However, no one knows how long this current state of the economy is going to last.
I think another way a person could look at this question is: if you were to start fresh today, what would you invest in today, how much %, and what would your diversification be today? The reality is, you are where you are today. History is history. The past is gone. If you were to start today, what would you do? I think that is the question that you may want to answer.
However, if you do sell your INTC shares that are on margin, and if INTC shares jump up, please don't hold it against me.
Best of luck to you & take care,
Amy J |
