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Intel Corporation (INTC) Option Traders Eye a Decade-Plus High

Intel Corporation's July 30 call was bought to open yesterday

by 3/26/2014 9:50 AM
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Option Brief: Intel Corporation (NASDAQ:INTC) option traders have tended toward the bullish side of the fence lately, and the trend was evident in Tuesday's session. Roughly 85,000 calls changed hands on the day -- an 86% mark-up to the average daily volume and nearly three times the number of puts traded. Against this increase in demand, the stock's 30-day at-the-money implied volatility (IV) rose 2.7% to 21.9% -- its highest perch since early February. Despite INTC's muted price action in recent weeks, a number of Wednesday's speculators bet on a big move higher for the stock over the next several months.

The most active strike yesterday was INTC's July 30 call, where 18,424 contracts changed hands -- 99% of which did so on the ask side. IV ticked higher on the day, and nearly all of the volume translated into open interest overnight, making it safe to assume that a new batch of bullish bets was initiated. Considering INTC has not toppled the round-number $30 mark in 10 years, delta for the call is docked at 0.08, suggesting a slim 8% chance the option will be in the money at July expiration.

However, it's worth noting that short interest represents nearly two weeks' worth of pent-up buying demand, at INTC's average pace of trading. Against this backdrop, it's possible that the out-of-the-money calls could've been purchased by short sellers looking to hedge their bearish bets.

As previously mentioned, INTC has been spent the majority of the past six weeks stagnating between $24.40 and $25.00. Over the past week, though, the equity has been stair-stepping its way higher -- thanks to its rising 10-day moving average -- and was last seen trading at $25.67.

Intel Corporation (NASDAQ:INTC) is poised to extend this momentum today, following reports the company has completed its acquisition of Basis Science. Intel purchased the San Francisco-based wearable technology start-up for about $100 million.


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