I can TODAY, RIGHT NOW, sell a JUNE 18th $22 PUT option for $.35 and BUY a JUNE 3rd $22 CALL option for $.26 for a 10 cent credit in my account.
There are many more option combinations that give me protection from any realistic INTC move.
I can sell a JAN 2012 $30 PUT option for $8.40 and buy a JAN2012 $28 CALL option for $.25.
The PUT allows me to protect to the upside and "acquire" intel shares at $30 - $8.40 = $21.60 if Intel is below $30 in Jan2012. If INTC goes crazy and the put expires worthless, I can exercise the $$28 call. MY COST is still below $22.
ANYONE who says shorts have "missed your chance", clearly does not understand (or is being dishonest about) possible exit strategies for those short.
Please do not attempt to confuse the cretins on this board with talk about actual market mechanics. It is quite clear: if you did not cover below 22, you are legally obligated (or otherwise incapable) of covering below 24.
Yahoo says there are 95mil shares short. There is plenty of open interest to cover these shares. It is hard to say what the motive is for those writing and those holding call/put contracts.
Last week there was a 100,000 contract volume on Jan $28 calls with 6,710 contracts open. The next day the open interest was 41,705. Someone created 35,000 new contracts which translates into 3,500,000 shares of stock.
Of the 95mil shares short, there is a large percentage that is written by the options market maker. The omm does not really want to hold the shares so he will hedge positions to keep his share position where he wants it. He will buy shares when warranted and will short shares when warranted to keep his accounts balanced.
SUPPOSE someone sells 10,000 in the money covered call contracts and the option market maker cannot find buyers. He will HOLD those contracts and IF HE THINKS the shares will get called to him, he will short the stock to stay neutral and neutralize the shares coming.
If I BUY-TO-OPEN PUT options or SELL-TO-OPEN CALL options, that defines the direction of the shares away from me. The person on the other side might get my shares.
If I SELL-TO-OPEN PUT option or BUY-TO-OPEN CALL options, that defines the direction of shares TO ME. The person on the other side of the option might have to DELIVER shares.
Intel is trading now at $22.30. Friday call options are trading at $.33/$.38 bid/ask. The SIZE is 1194/353 ... buyers for 1194 contracts at 33 cents .... sellers of 353 at 38 cents.
SUPPOSE I just sell call options at 38 cents and sell as many as people want? Intel stock will trade FLAT LINED. When INTEL goes up, the option market maker will take may calls and short INTC to match holding the CALL.
I can PEG the price of INTC shares by selling calls.