According to a statement released by Intel Corporation on Wednesday,$Intel (INTC) $The company appointed Lip Bu Tan as its next CEO. Chen Liwu, 65, will officially take office as CEO on March 18. He will rejoin the board after stepping down in August 2024.
After the announcement of the above news, Intel's stock price rose nearly 11% after hours, and the stock rose 4.6% in regular U.S. stock trading on Wednesday. In the past 12 months, Intel's stock price has fallen by more than 54%, bringing its market value to $89.5 billion.
Chen Liwu's predecessor, Intel CEO, was Pat Gelsinger, who was dismissed by the board of directors for failing to effectively revive Intel's product lineup. Gelsinger has tried to transform Intel into a chip foundry, a contract manufacturer that makes products for outside customers, but that attempt is still in its infancy.
Gelsinger was seen as a potential rescuer when he took the helm in 2021, but after several consecutive quarters of disappointing results-including what analysts called the worst quarterly report in the company's history in August 2024, Wall Street lost faith in his transformation plan.
Being in charge of Intel was once the most prestigious position in the industry, but now it has become one of the toughest jobs in the chip field. Chen Liwu shoulders the important task of revitalizing Intel.
Protectvie Put Options Strategy
Among the option strategies, there happens to be a strategy suitable for the current situation of "bargain hunting:" called Protectvie Put. This strategy can help investors incur limited losses even in the situation of "bargain hunting halfway up the mountain", allowing investors to bargain hunting boldly with confidence. The method is very simple. When buying stocks, buy the corresponding Put option (Put), that is, Long stock + long Put.
Investors typically choose protective put strategies for two different reasons;
1. Limit risk when buying stocks for the first time.
2. Protect previously bought stocks when the short-term forecast is bearish but the long-term forecast is bullish.
Intel Options Strategy
Investors bought 100 shares of Intel, each worth $22.58. Investors believe that stock prices will rise in the future. However, investors want to hedge against the risk of unexpected price declines. Therefore, the investor decides to buy a protective put contract with a strike price of $20 (a put contract contains 100 shares), which costs $113 for the protective put.
Initial investment cost
Buy 100 shares of Intel at $22.58 per share, for a total cost of $2,258.
At the same time, buy a put option (protective put), which costs $113.
The total investment cost is $2258 + $113 = $2371.
Protection when stocks fall sharply
A put option allows you to sell a stock at $20 per share when the stock price drops to or below $20.
If the stock price falls to $20 or lower, you exercise the option and you can sell 100 shares for a total of $2,000.
In this way, you can lose at most $2,371-$2,000 = $371. No matter how low the stock price falls, the loss will not exceed $371.
Earnings when stocks rise
When the stock price rises, you don't have to exercise the put option and hold the stock at the market price instead.
But because of the option purchase, the total cost is $113 more than simply buying stocks.
Only when the stock price rises enough to cover this $113 option fee will you count as breaking even (about $23.71 or so).
When the stock price exceeds this level, you start to make a profit.
Summary
Drop protection: The put option sets a "safe bottom line" for you, and the maximum loss is controlled at $371.
Profit from rise: If the stock price rises above $23.71, it can start to make profits; The more you go up, the greater the gain.
Policy applicable: This strategy is suitable for investors who are optimistic about the long-term rise, but are worried that there may be a large decline in the short term.
This simple analysis helps you understand that by buying put options, you get insurance against a sharp drop in the stock price at a lower cost, thus avoiding greater l
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