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I'm curious about the INTC catch-up trade. First, the recommended allocation is 5%, less than the 6.9% that PRO currently has of INTC. Second, the put does not seem to meet PRO criteria in that for the annualized return to be 15%, the put option would have to be priced above $1.80 whereas the recommendation was to sell above $.90. Comments?

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Hi Richard,

The put criteria are guidelines and they're mainly guidelines for when you're seeking income and are less inclined to own shares. When we're more inclined to buy the shares, we can write just about any puts we want to get a lower potential buy price (within reason, of course).

On Intel, 5% to start made sense, but we're tracking our Catch Up trades and would recommend the next 1.9% or so on a decline. Intel is up a lot lately, so I didn't want to suggest 7% right off the bat. That said, these nuances may be hard to track over time, so we may not use them much.

Each allocation on the Recommendations tab (the portfolio) shows what we're comfortable with. If it's too large, we'll issue a trade alert and shrink a position.

We are also likely to add to smaller positions over time.

I hope this helps.


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