Schaeffer's Trading Floor Blog

Options Check-Up: Intel Corporation, NetApp Inc., and iShares Silver Trust (ETF)

Analyzing recent option activity for INTC, NTAP, and SLV

by 5/20/2014 5:54 PM
Stocks quoted in this article:

Among the names attracting attention from options traders lately are chip maker Intel Corporation's (NASDAQ:INTC), IT solutions provider NetApp Inc. (NASDAQ:NTAP), and the iShares Silver Trust (ETF) (NYSEARCA:SLV). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on INTC, NTAP, and SLV.

  • Although INTC stands nearly 11% higher from its Feb. 5 year-to-date low of $23.50 to trade at $26.04, option traders have been piling in on the bearish side of the aisle. In fact, during the past two weeks, long INTC puts have been scooped up over calls at a near-annual-high rate, according to the equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.33, which ranks 5 percentage points from a 52-week acme. It's no wonder front-month option buyers have been drawn to Intel Corporation, considering Meanwhile, Intel Corporation's Schaeffer's Volatility Index (SVI) of 14% ranks the lowest of all comparable readings from the past year. In other words, premium on INTC's front-month contracts is cheaper now than it has been at any other time during the past 12 months, from a volatility perspective. Looking ahead, the company will host its annual shareholder meeting on Thursday.

  • NTAP option bulls have been making their presence known lately, as the company prepares to tell-all in the earnings confessional tomorrow evening. To be more specific, speculators have bought to open NTAP calls over puts at an accelerated clip in recent sessions, per the equity's sports a 10-day ISE/CBOE/PHLX put/call volume ratio of 5.06, which ranks in the 88th annual percentile. Now is as good a time as any to purchase short-term bets on NetApp Inc. -- which is down 17.5% year-to-date to trade at $33.95 -- as the stock's SVI of 30% ranks in the bottom one-third percentile of its 12-month range, meaning front-month options are relatively inexpensive. Outside the options pits, analysts have upped the bearish ante on NTAP ahead of its quarterly event, and this morning, Cantor joined the skeptics on Wall Street, cutting its price target on the stock to $46 from $53.50.

  • Bearish betting has picked up steam in SLV's options pits recently, as the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 0.36 ranks higher than 70% of similar readings from the past year. This means puts have been bought to open, relative to calls, at a faster-than-usual pace of late. This comes as no surprise, considering iShares Silver Trust (ETF) has shed more than 11% over the last three months to trade at $18.65. Furthermore, short-term bets are attractively priced on SLV right now, from a historical standpoint, with the stock's SVI of 21% ranking in the bottom 4% of its annual range.
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