Schaeffer's Trading Floor Blog

Options Check-Up: Intel Corporation, Dendreon Corporation, and EMC Corporation

Analyzing recent option activity for INTC, DNDN, and EMC

by 1/29/2014 7:19 AM
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Among the stocks attracting attention from options traders lately are digital technology specialist Intel Corporation (NASDAQ:INTC), biotech firm Dendreon Corporation (NASDAQ:DNDN), and IT services provider EMC Corporation (NYSE:EMC). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on INTC, DNDN, and EMC.

  • INTC is down more than 8% from its near-six-month high of $27.12, tagged on Jan. 15, to trade at $24.90. Still, bullish bets have been in higher demand than usual, relative to their bearish counterparts, with the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio of 2.17 ranking in the 68th annual percentile. Now is as good a time as ever to place near-term bets on Intel Corporation. The stock's Schaeffer's Volatility Index (SVI) of 20% sits in the bottom 17% of its 12-month range, indicating short-term options are very affordable right now, from a volatility perspective.

  • Though DNDN has lost 57.5% over the past 12 months, option traders have bought to open calls over puts at a much faster pace than usual in recent sessions, mainly because at the equity's current perch of $2.74, the profit potential of put buying is limited. The recent preference for calls over puts is evidenced by the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 13.01, which ranks in the 79th annual percentile. Meanwhile, Dendreon Corporation's SVI of 100% sits in the 47th percentile of its 12-month range, showing short-term option prices are relatively average right now.

  • EMC option traders were picking up long calls over long puts at near-annual-high levels, ahead of the company's fourth-quarter earnings report this morning. In fact, the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 14.36 is just 4 percentage points from a 12-month peak. Short-term options are leaning toward the expensive side, with EMC Corporation's SVI of 26% ranking in the 56th annual percentile. Heading into the scheduled event, EMC shares were relatively flat, on a year-over-year basis, trading at $25.38.

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