INTC iron condor, priced on the real chain

Four legs, one idea: you are selling the market's estimate of how far INTC can travel. The short strikes ($74 / $118) define the range you're renting out; the long wings ($70 / $120) cap what a violent move can cost you.

Both spreads cannot lose. INTC finishes on one side of the market, so at most one vertical goes in the money — which is why max loss is the width of ONE spread minus the credit, $296, not double it. Max profit is the $104 credit, earned by doing nothing.

Breakevens land at $72.96 and $119.04. Outside that band the position loses; between it, it wins. That band is 51.1% wide relative to spot, against 85% implied vol over 27 days.

Return on risk is $104 against $296 — roughly 35% if it works. You need a high hit rate to justify that ratio, which is exactly what the 68% probability is telling you.

Assignment risk is real on the short legs, especially the calls near ex-dividend, and especially in the last week. Being assigned on one leg of a four-leg structure leaves you with a stock position and a broken condor over a weekend.

The killer is a trend, not a spike. A slow grind through the short call over three weeks costs the same as a gap and gives you more chances to talk yourself out of closing.

Liquidity is a risk, not a convenience. The moment you most want out of a short-premium position is the moment the spread is widest, and the exit price you modelled at mid will not be available.

Cheap shares plus high implied vol is the combination that draws small accounts to Intel, and the yield tables look wonderful. What they encode is a genuinely bimodal outcome: the foundry strategy works or it does not, and the market is pricing both branches. Selling puts here is selling insurance on a binary event with no settlement date — sustainable at small size, ruinous at the size the buying power allows.

INTC's Aug 28 strikes are $2 apart near the money (2.22% of spot). On a ladder that wide, "pick the 0.30 delta strike" resolves to whichever rung happens to be closest — sometimes not close at all. 18k contracts of open interest on Aug 28 is workable around the money and thin in the wings — width costs more here than the ladder suggests. 32 strikes on that expiry — 47% of the board — carry prints that agree with their own implied volatility and hold up across the ladder, and those are the strikes priced here. Liquid near the money with a fine ladder; the far wings carry stale prints more often than the volume suggests.

Skew is inverted: the 25-delta CALL implies 6.5% more vol than the put. That is the market pricing upside risk above downside risk — a squeeze, a takeover rumour, or a crowded short. Selling calls into an inverted skew pays better than usual and is riskier than usual for exactly the same reason. The term structure is backwardated — Aug 28 implies 3.1% MORE vol than the following month. That is the signature of a dated event inside the front month, and it is the strongest argument for picking the expiry that sits behind it.

At 85% ATM implied vol, the Aug 28 options are pricing a one-standard-deviation move of $20.95 over 27 days — roughly −23.2% to +23.2%, or $69.25 to $111.15. Everything the iron condor above collects is rent on that range. If INTC routinely covers 23.2% in 27 days, the credit is fair compensation rather than edge.

The mistake this name punishes hardest: Reading a low share price as low risk. The percentage moves here are semiconductor moves; the dollar amounts just make them easier to underestimate.