12-16-2013, 04:27 PM
(09-28-2013, 10:36 PM)ChadR Wrote: I agree with hendi_alex in that you should go out further for your option calls. If you don't think that the price will drop too much you could go out to the April 2014 call and get $1.87 for each option and pick up 2 more dividend payments. The option premium is a short term capital gain. This is the reason I do all my option trading in my ROTH IRA. You can specify which shares you want called assuming that the price is over $22 once the option expires. You might want to find out how much you are charged when a call is exercised. Some charge double the option price when one is exercised. I found this out the hard way the first time I had shares called. Hope this helps. And if I was in your shoes and was wanting to reduce my exposure to INTC I would do it this way. Worst thing to happen is that INTC drops to $18 before the option expires. The risk for trying to increase your returns by using options.
If those longer out options are in the money by ex-dividend date, they will be exercised. When exercised you will NOT receive the dividend, the option holder will.