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Intel Corporation Message Board

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  • yourwishismine yourwishismine Oct 11, 2012 12:55 PM Flag

    INTC: Put OCT 20 strike 19 0.02 cents will be 1$ next week

    Ok that makes more sense now. Thank you.... I guess I'm still a little confused on the use of the term Strike price... But I got what the thread is about now. Thank you again.

    Sentiment: Strong Buy

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    • The STRIKE PRICE is the price of the STOCK that you are "insuring".

      If I BUY a $19 STRIKE PRICE PUT option that expires on OCT 20th, then the sellers are agreeing to buy the INTC shares at the $19 strike price. Someone will sell me the right to make them buy my INTC shares at $19. That is not very valuable when Intel is trading at $21.80.

      How much would I have to pay to have someone buy my shares at a $20 strike price, on or before Oct 20th. 6 cents

      $21 strike = 20 cents
      $22 strike = 60 cents IN THE MONEY
      $23 strike = $1.34
      $24 strike = $2.27
      $30 strike = $8.25 Notice that there is near zero premium for deep in the money option strikes. $30 - $8.25 = $21.75

 
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