Intel shares rose more than 6% on Wednesday, becoming one of the biggest gainers in the S&P 500. Intel recently launched the next-generation PC platform processor Core Ultra3 at the Consumer Electronics Show (CES) for more than 200 AI personal computers. Analysts attributed Wednesday's enthusiasm to market expectations of higher server CPU prices.
INTC Bear Call Spread Strategy
1. Strategy structure
Investors inIntel (INTC)Establish a * * Bear Call Spread * * strategy on options.
The strategy passesSell lower strike price Call while buying higher strike price CallConstitute, belonging toBearish or volatile strategies with limited returns and limited risks。
(1) Sell Call with lower execution price (main source of income)
Investors sell a strike priceK ₁ = 45Call option to receive premium$0.76。
This Call is closer to the current price and is part of this strategyMain sources of premium。 As long as the INTC expiration price≤ $45, the option will be completely invalid, and investors can retain all premium rights.
(2) Buy a higher execution price Call (risk protection)
Investors buy one strike price at the same timeK ₂ = 47Call option, pay premium$0.43。
This Call is used to appear at INTCA sharp riseTime limit the maximum loss, so that the risk of the overall strategy is strictly capped.
(3) Call-side net income (per share)
Net premium = Sell Call − Buy Call = 0.76 − 0.43 =$0.33/Share
Initial net income
Since 1 lot of options = 100 shares:
Net premium (per share):$0.33
Initial net income (per contract): = 0.33 × 100 =$33/contract
The initial net income is the bear market call spread strategyMaximum potential profit。
3. Maximum profit
WhenINTC expiration price ≤ $45Time:
45 Call and 47 Call are both extra-price
Both options lapse
Investors get maximum profits:
Per share:$0.33
Per contract:$33
4. Maximum loss
The largest loss occurs whenCall spread fully triggeredThe situation, that is, INTC has risen significantly.
Strike spread width: = 47 − 45 =$2
Maximum loss (per share): = Strike spread − Net premium = 2 − 0.33 =$1.67/Share
Maximum loss (per contract): = 1.67 × 100 =$167/contract
Conditions of occurrence:
INTC expiration price ≥ $47
5. Break-even point
There is only one break-even point for a bear-market call spread:
Breakeven Price = Sell Call Strike Price + Net premium = 45 + 0.33 =$45.33
Maturity judgment rules:
INTC < $45.33 → Earnings for Investors
INTC = $45.33 → No Profit, No Loss
INTC > $45.33 → Investor losses
6. Risk and return characteristics
Maximum benefit:$33/contract (limited)
Maximum loss:$167/Contract (Limited)
Profit-loss ratio: gain: loss ≈ 33: 167 ≈1: 5.06
7. Strategic characteristics and applicable situations
Strategy Characteristics
Bearish or oscillating strategy
The core assumption isINTC won't rise significantly
Receive time value by selling Call
The maximum risk and maximum return can be clarified when opening a position
There is no need for the stock price to fall, as long as it does not break through the key resistance level
Applicable situations
When investors judge:
INTC Short TermShock or slight decline
Before expirationBreakout of $45-47 range unlikely
Hope inIdentify the maximum riskObtain premium income on the premise of
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