Unusual Option Activity: Intel (INTC)

Chipmaker Intel (INTC) sold off heavily last week following the company’s latest earnings. One trader sees shares rebounding from their recent drop.

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  • That’s based on the February 23 $46 calls. With 24 days until expiration, 9,463 contracts traded compared to a prior open interest of 194, for a 49-fold rise in volume on the trade. The buyer of the calls paid $0.81 to make the bullish bet.

    Intel recently traded for about $43.50, so shares would need to rise about $2.50 or about 6 percent, for the option to move in-the-money. The strike price is well under Intel’s pre-earnings price near $50.

    While Intel did report the opening of a new fabrication facility, Fab 9, in Mexico, the company warned that it’s still late to the AI chip race. Intel gave a poor outlook, which was the big reason for the drop in shares.

    Even with that drop, Intel is up over 60 percent in the last year. And revenues did rise 10 percent as well.

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  • Action to take: Investors may want to consider picking up shares following the lowered outlook. At current prices, Intel also pays a 1 percent dividend.

    For traders, the February $46 calls are an inexpensive way to bet on a partial rebound in shares in the coming weeks. Traders could likely see high double-digit returns on the trade in the coming days.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.


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