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Technology Stocks : Intel Corporation (INTC)
INTC 36.15-0.6%Dec 24 12:59 PM EST
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To: Elmer Phud who wrote (178136)5/26/2004 6:19:47 PM
From: Noel  Read Replies (2) of 186894
 
IOW, you think Intel is acting like a covered-call writer

I doubt that it is true. But it is a good way of analyzing the situation.

If Intel buys a share for every stock option issued then
i) If the stock goes up, the cost to Intel is only the interest on the initial payment. This is offset
by the tax benefit Intel gets by employees exercising options. Hence, the total cost is lower.
ii) If the stock goes down, they still hold the shares.

My only problem with scenario ii) is what about the the stock that was bought at ridiculous
00 prices?
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