Step 1: Direction

Fundamentals on INTC:
INTC
INTC is a very strong company &
compares quite well to its piers. The
PEG at 2.02 is less than half of the
normal value in the sector. The EPS
values have suffered recently, and
they have recently closed above their
avg target price. This may be cause
for a pullback.

Sentimentals toward the company
are mixed from a sector control
standpoint over some of the items
they supply, however, their market
share is still quite large. Market
sentiment has calmed somewhat but
still has cautionary feelings being
shown. Therefore, I dont see a large
move due to a large market
correction (or similar). I do anticipate
some pullback of INTC shortly, but it
may not happen until after earnings.
There have been some earnings & revenue problems of late. That, along with the recent
Run up in price, may be reason to project a substantial move around earnings.
Technical assessment:
The stock itself has traded in a range from $12 to $29ish for the last 10 years. Currently,
the stock is trading near a new high for the past 10-years. I dont see any reasons to cause
it to make a severe move in either direction. If anything, I think it will stabilize a little.
Right now, however, it just keeps following its upper Bollinger Band farther up.

The current chart shows the IV reaction to earnings the past 4 qtrs. It is fairly consistent.
I am looking to take advantage of the upcoming earnings event (7/15
AMC). I can safely do straddles, strangles, and diagonals. I do not see a
major move happening (not over $4 one way or the other). Therefore,
after doing some math & what-ifs, I have decided to place a double
diagonal on INTC.
When the trade happens, the details will be below this.
Step 2: Trade Possibilities
INTC Earnings 7/15/14 AMC

Possible IV capture trade

The chart for this trade shows it not
to do well if the stock doesnt move
much. It doesnt, however, reflect a
change in IV. The following slides
show the possiblilities depending on
movement of the stock price & IV.
Step 3: Structure Trade
(Continuation of the
previous trade analysis)
This shows the starting greeks of the trade. The only thing thats a little backwards is the
theta, which would preferably be positive. Theta will turn positive as the trade
progresses.
After assessment of LT charts, it appears that IV rises to approximately 25% a week before
earnings. The above charts have had the IV changed to 22%, one showing closing approx.
a week before earnings & the other just before earnings. Very nice profit trade.
After assessment of LT charts, it appears that a $4 move is about the maximum
Monthly move for INTC at or around earnings. Therefore, the above charts show $4
moves up & down, without any change in IV. Looks like good chance for profit.
Dn $4
Up $4
The above charts show $4 moves up & down, with a moderate change in IV.
Still able to catch a good profit.
Step 4: Exit Points
PE #1: If INTC move up or down substantially & quickly, will close for 30% profit and
assess possibility to place another similar trade.

PE #2: Close trade for 50% profit ahead of earnings.

SE #1: If not able to close at PE points, close trade at earnings date (BMC).