Long Intc....looking For Ideas

Discussion in 'Trading' started by mschey, Jan 17, 2006.

  1. Hi,

    Because I am a complete dumbass, I didn't exit out of INTC at the close, I simply "forgot" about it and walked out of the office!

    Looking for ideas on what I can do to handle it. The obvious is to exit the position tomorrow, perhaps trade it some, though nasdaq is not my forte'. So fellow ET'rs.....what say you!

    I am long 2700, and considering doing some covered calls against it!
  2. I had some put options in Intc i covered yesterday. That being said I'm thinking of buying some here with a 1-2 year time horizon. But if you got into it as a trade try getting out.
  3. keafan


    My rule is that if I'm in the trade because of a mistake I cut it immediately and go on about my busines. Forget about it but learn from it, if you know what I mean. From what I have seen of your posts you are a trader, not a mistake-trade repair specialist. Cut it and get back to what you do - trading.

    We could all give you advice about covered writing, hedging against SMH until u get a better exit, etc but without knowing your haircut expense,etc it would be a waste of time to give repair strategy advice. "ALWAYS cut mistakes" has worked for me for a lot of years. It will just be a distraction from your normal mode of operation to maintain the position.
  4. Take the loss, and lesson learned, almost 10% haircut in AH, can't see it on this chart yet, but that's right through the 200ma...look at those highs and lows since Dec...

    Who wants to bet on a 1 or 2 yr plan for recovery, insane, move on to bigger fish.
  5. Choad


    Instead of just straight CCs, you might want to look at the ole "stock repair" strategy.

    The idea is to try to find some good upside to make back your loss, with no cost, and the same risk as just hanging on to your stock. You buy 27 near money calls and sell 54 OTM calls to pay for the longs. If INTC pops back up in a few months, you have a bunch of upside with the long calls/stock combo.

    And if INTC tanks, you are no worse off. For example, you could do the JUL25/27.5 for about 2.3/1.15. If INTC rises above 27.5 (near expiration, or you don't make as much) you would make about $12K. The stock by itself would only make about $5K. And selling 27, JUL27.5 calls against the stock only makes about $8K, but does give you that $3K downside prem income/protection.

    What strikes and months to use depends on your outlook and how long you want to fight this battle. I'd almost guarantee you could get all your losses back with OTM/ATM CCs, but it could take quite a while...

    edit: some of the advice to just move on, could be good advice. fighting these battles may not be worth the effort. INTC could dump another 20% or whatever. good luck.
  6. Yes, take the loss. Stock is dead money for at least a Q, and the option vols are going to take a 400-500bp hit tomorrow at the open, coupled with the delta loss from today to tomorrow. There simply won't be any juice to selling calls into the shares. Vols will likely bottom tomorrow.

    There is no such thing as a repair strategy. Trying to repair this INTC loss waives better opportunities elsewhere.
  7. Choad


    I agree. But I'm also sure that losses can be made up, safely, in the large majority of cases.

    Yes, it depends on the stock. And certainly, some stocks never come back. Is it better to just move on? Yeah, I think so, but he did ask what can be done. '

    It might take years, but with our friends Options, you CAN make back losses. I've done it over and over and over. Is it wise and prudent? Probably not!

    Good trading to all. :cool:
  8. What is your cost basis ?
  9. I think you need to look at every position as though you have no position -- would an INTC CC play be worthwile tomorrow morning when contrast against a hundred other techs with better prospects and higher vols?

    A CC or short put on INTC would be the last trade I would make tomorrow.
  10. Let's just say it's at least 10% higher than the last AH print...:eek: you do not want to 'rehab' this kind of pain.
    #10     Jan 17, 2006