Setup
INTC remains in the Wheel cycle that began with the August 17 $98 Cash-Secured Put. The shares were assigned at $98 after the original CSP collected $324.
A $100 Covered Call was sold August 25 for $276. It expired worthless September 4, leaving 300 shares in the portfolio and reducing effective Wheel basis to approximately $96.00.
INTC has since recovered sharply. Shares traded around $101 at entry after moving above EMA21 near $94.15, EMA34 near $96.19, and SMA50 near $100.06.
SMA100 near $104.22 is the next important technical area. This remains recovery management after assignment.
Structure
Covered Call sold at the $106 strike, expiring September 11 with three days to expiration.
Premium is $1.51 per share, or $453 across three contracts covering 300 shares.
The $106 strike is $8 above the original $98 assignment price and preserves approximately $5 per share of additional upside from the $101 entry price. Call delta was approximately 0.27 at entry.
Assignment Logic
The position was already assigned before this Covered Call sale.
If INTC remains below $106 through September 11, the call expires worthless, the $453 premium is retained, and the shares remain available for another Covered Call cycle. Effective Wheel basis falls from approximately $96.00 to approximately $94.49.
If INTC closes above $106, the 300 shares are called away $8 above the original assignment price. That produces a $2,400 stock gain: ($106 - $98) x 300.
Cycle premium is $1,053: $324 from the original CSP, $276 from the first $100 call, and $453 from this $106 call. Approximate completed-cycle P&L at $106 is $3,453 before commissions and fees. Call-away is acceptable.
Premium Context
Premium is fair rather than elevated.
The September 11 $106 call provides $1.51 per share with only three days until expiration, or $453 across three contracts.
The premium reflects:
- the sharp recovery in INTC
- elevated realized volatility
- proximity of expiration
- continued upside uncertainty after the move above $100
Implied volatility is around 65% while recent historical volatility is approximately 70%, so IV remains slightly below realized volatility. This is not an obvious volatility edge.
The $453 is meaningful income for three days while keeping the strike above both assignment price and current share price. Premium is useful; recovery room remains the priority.
Trade Structure
Management Plan
If INTC remains below $106 through September 11, the call expires worthless, the full $453 premium is retained, and effective Wheel basis falls to approximately $94.49.
The shares then remain available for another Covered Call cycle.
If INTC closes above $106, the shares can be called away. The exit remains $8 above original assignment price and closes the cycle for approximately $3,453 before commissions and fees.
No rolling simply to avoid call-away.
The strike was selected at a level where assignment is already acceptable.
Process Note
The previous $100 Covered Call did its job: it generated $276 and expired worthless while INTC remained below the strike. Now the stock has recovered above $100, changing the strike decision.
Selling another call too close to the stock would collect more immediate premium but reduce recovery room just as shares begin moving above the previous call level. The $106 strike gives up some immediate income for more upside and sits above SMA100 near $104.
The call still collects $453 in three days. If INTC stays below $106, effective Wheel basis falls to approximately $94.49. If it moves through $106, I am comfortable letting shares go and closing the cycle.
