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As we approach midday, Intel Corporation (NASDAQ:INTC) calls are being exchanged at a faster-than-usual pace. Specifically, the contracts are trading at an 82% mark-up to the typical intraday rate. What's more, short-term contracts are in demand, as the semiconductor stock's 30-day at-the-money implied volatility is up 5.2% to 19.6%.
Most active by a mile is INTC's July 32 call, where more than 13,000 contracts -- including a sweep of 9,000 -- are on the tape. The calls are mostly being bought to open -- as confirmed by Trade-Alert -- with the traders anticipating the equity will race to a new high during the next two weeks, topping last Thursday's 10-year peak of $31.36. Specifically, at-expiration breakeven is $32.20, or the strike price plus the volume-weighted average price of $0.20. Additional gains will accrue north of here, while the most the buyers have on the line is the initial cash outlay, should the options expire out of the money.
Today's traders are placing their bets ahead of Intel Corporation's (NASDAQ:INTC) second-quarter earnings report, scheduled for next Tuesday evening -- three sessions before front-month options stop trading. The company has matched or exceeded analysts' bottom-line estimates in six of the past eight quarters, and this morning's call buyers may be gambling on another earnings beat to help the shares march higher. In other fundamental news, the Semiconductor Industry Association announced strong global growth in May semiconductor sales.