Re: I would be willing to gamble a small amount on Intel's good Q4 results and Vista launch, which would probably mean February expiration. I would certainly welcome Intel going down in sympathy tomorrow (to get a better price).
Actually, the better bet I've found is to aim farther out, and sell it back to the market well before expiration. For example, there are APR07 $22.50 calls going for $0.95 right now, and JUL07 $25 calls going for $0.60. This is the elbow of the curve, which will go up substantially if the stock gains a couple of dollars. For example, if you look at JUL07 $22.50, they are going for $1.45, which is 2.4x the going rate of the $25s. If Intel's price were to go up $2.50 tomorrow, you'd bag close to 2.4x by selling your JUL07 $25 calls back to the market. The curve pretty much moves to the right like that. Over time, however, the premium for having calls with distant expiration dates diminishes. So if Intel ends up growing by $2.50 by February, you aren't going to bag 2.4x. But it might still be enough to be happy about it.
And the good thing about calls is that they remain relatively stable unless the stock goes through pretty extreme price moves. With a stock like INTC, I wouldn't be bearish enough to expect some sharply downward moves. But there is risk in that, because the options will quickly move towards worthless in that scenario. You can sell them back to the market at any time to recover some of your investment, however. Usually, you can do this long before the value of the option reflects any terrible news.
Basically, you make more the faster that the stock goes up prior to expiration. So if you think INTC may not rise until April or later, then you might even consider JAN08 $27.50 options. They are priced at $0.70 right now, and I think can be worth double this if Intel moves up by a couple bucks by Feb.
You be the judge, but I think any of these options look good.
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