A Dirt-Cheap Way to Play Intel (INTC) With Options – T3 Live
T3 Live
Shares

A Dirt-Cheap Way to Play Intel (INTC) With Options

Shares

Intel (INTC) is reporting second-quarter earnings after the close today, and implied volatility on weekly options is incredibly high.

This creates a good opportunity for a calendar spread, where you short expensive near-term options and go long cheaper long-term ones.

Here's a trade I'd look at:

-Sell $36 call (this Friday's expiration) for 36 cents
-Buy $36 call (August 19 expiration) for 50 cents

Debit of 14 cents per lot (give or take 2 cents).

This is an extremely cheap way to play a flat or up reaction in Intel shares, and it could profit even if the stock drops modestly after earnings.

The best case scenario is Intel closing at $35.99 on Friday. That would put the short call at $0, and the long call worth around 58 cents, assuming a drop in IV to 17%.

That would be a 314% profit.

The worst case scenario would be if Intel drops big, which would wipe out the entire 13 cent debit.

Want to learn to make money in options?

This Thursday, we're hosting 2 special options webinars:

Click here if you want to learn Mark Melnick's short-term options strategies.

And click here if you want to learn Doug Robertson's longer-term, income generating options trading techniques.