What to do at the market panic?

The markets have been truly at a panic state in the past few weeks and I'm pretty sure it is of a lot of pain for most of the investors going through this. For the majority it is no fun to see the markets declining day after day and their stocks depreciating in value. Of course, it you are truly a long-term investor, managing a portfolio of high quality of dividend paying stocks, then a market correction like this should be welcome and make you happy. I'm definitely so, knowing that my dividends are buying more shares of stocks I want and I can also increase my positions with lower investment costs. So I was busy in the past few weeks to buy, not run. One particular stock I have been closely watching is Intel (INTC).

You may recall that exactly 3 months ago, I talked about Intel and my option positions. At that time, Intel was on fire and I thought it should come down first before moving further higher. Here is what I said: "So are you starting to become interested in Intel now? I hope you did so much earlier. While I think Intel is a great stock to buy and hold for long-term, I don’t like the euphoria about it at the moment. Suddenly all the analysts seem to wake up as if they are much cleverer than others to see the potential of Intel and are busy to upgrade it for buy. I don’t like it for the short-term. If you want to buy, likely you may get a better chance in a few months from now when the euphoria sets down. I think it is short-term overbought at the moment. It would be a much better buy if it can decline towards $30 or so." Well, as expected, Intel did come down substantially in the past few days, almost touching $30, the level I was waiting for. Intel at this price is a great value. It has just reported great earnings but the market was too pessimistic that they basically dumped everything regardless. So I took the advantage and did two things:

• As I said, I was stupid to set up a cover call too early to cap my long call profit potential up to about $30. I think Intel has a greater potential to go up much higher from here. I was definitely not happy about it. So this mini crash of Intel declining to about $30 gave me a great opportunity to unwind this portion of my options. I closed my Intel covered calls and my remaining long calls have no limit now regarding how high it can go. No need to say how happy I am with this chance!!
• The panic mood has enlarged the premium of options significantly. In other words, it is a great time to earn higher income from options. I sold more short term put options of Intel and expect to earn 3.3% from it with 2 weeks, which is equivalent to an annualized return of 85%!

If you haven't bought Intel, this is clearly a great time to buy! I don't know if Intel may go down further in the near future but I don't care as I know it is already very cheap at around $30.