To all;
The title of this thread caught my eye, so I thought I'd add my idea. I apologize if this has been mentioned before; I only went back a week or so (25 postings), and didn't see it (saw hardly anything about Intel options, actually!)
One strategy which is low risk and increases reward on Intel gains is to buy deep in the money LEAPs. The Jan 99 LEAPs with a strike price of 100, for example, are selling for just under $60. They go up almost 1:1 with the stock. If Intel gains only 10% (145->160) over the next 18 months, you break even. If it goes up less than that (pretty low risk, I'd say!), you lose money. If it goes up above 160, your gains are magnified over owning the stock.
Some sample calculations:
Current price 145 x 50 shares = $7250 invested
Jan 99 100 LEAPs @59 x 1 (100 shares) = $5900 invested.
If Intel closes on options expiration day in Jan., 99 at
145, you break even with the shares, lose $5900 with the LEAPs
160, you make $750 with the shares, $100 with the LEAPs
180, you make $1750 with the shares, $2100 with the LEAPs
220, you make $3750 with the shares, $6100 with the LEAPs.
Since I think Intel will get to 180 this year, let alone next, this looks like a low-risk, high-reward strategy - not a home run, but a high-percentage shot, for sure.
Bob |
