Earn Large Cash Payments Companies Trading At Low Valuations.

Selling put options is a great way to generate income and solid annualized returns by taking less risk than owning the same amount of common stock long. When I look for these trades I target earning 2% or more for every 30 days of expiration time.

Selling a put option is a strategy where you are slightly bullish on a stock and this reduces your risk by being able to name the price (called the strike price) you are willing to pay for the company. This contract is valid for a specific amount of time called the expiration date.

These terms are set by you and for agreeing you are paid upfront for the potential obligation to buy 100 shares of stock for every put sold. I typically look at options expiration dates between two weeks and two months.

Smart Investors Believe Intel Is A Great Buy Here

The SEC 13F filing just reported that legendary investor Seth Klarman bought 18.2 million shares of semiconductor giant Intel (INTC) a $1 billion position about 10% of Klarman's total portfolio.

You can earn along side Seth buy selling put options where you will earn income for agreeing to buy the stock at a lower price.

Business is good with sales up 8% to $78 billion over the last 12 months and a fantastic 25% profit margin. This business generates so much free cash flow, $21 billion over the last 12 months, they do not know what to do with it. With business this strong you would think the shares would be trading at much high valuations but you can buy shares today for only 7.2 EV/EBITDA verse paying 19 for the S&P 500.

Shares are back above the 200 day moving average and the 50 day with a golden cross occurring recently (50 day in an uptrend rising above the 200 day). They have solid support around $45 where it has bounced off every year since 2018.

Trade details:

Sell to open April 16th, $57.5 puts on Intel for $1.25 or better using a limit order. You will be paid 2.2% upfront on your purchase obligation and agree to buy shares at an 8% discount to Friday's closing price.

At expiration if shares are above $57.5: the puts will expire worthless for a 15% annualized return.

At expiration if shares are below $57.5: put sellers will buy 100 shares of stock for every put sold at a 10% discount to Friday's closing price including the premium received. You will then be able to sell covered calls to earn even more income.

For protection use a stop loss at $42.19 (25% below your adjusted cost basis).

Follow one of the greatest investors and collect a nice cash payment today.

Divider provided by barge

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. The information provided should NOT be considered advice. The topics discussed are risky and have the potential to lose a substantial amount. I am not an investment professional and therefore do not offer individual financial advice. Please do your own research before investing.

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