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Most Active Options Update: Intel Corporation (INTC)

Intel Corporation put buyers take advantage of falling prices

by 5/12/2014 2:31 PM
Stocks quoted in this article:

The 20 stocks listed below have seen the highest total options volume over the course of the last 10 trading days. Data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White, and highlighted names are new to the list since the last study was run. One stock seeing notable put activity this afternoon is Intel Corporation (NASDAQ:INTC). Dropping off the list since last time were eBay Inc (NASDAQ:EBAY) and Gilead Sciences, Inc. (NASDAQ:GILD).


Bearish speculation on Intel Corporation has ramped up during the past couple of weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, 17,730 puts have been purchased to open during this time frame, versus 15,936 calls. The resulting 10-day put/call volume ratio of 1.11 stands higher than 92% of all ratio readings from the past 12 months, indicating a heightened demand for long puts (versus long calls).

It looks like more of the same in the INTC options pits today, even as the stock has edged 0.3% higher to $26.39. Total put volume has slightly surpassed call volume today, and the two most active strikes (by a healthy margin) are on the put side of the fence. The June 26 put has seen nearly 6,100 contracts change hands, 73% of which traded off the ask price. Open interest is higher than volume, however, and implied volatility (IV) has declined slightly, so this may be a mix of opening and closing activity.

Also notable is the October 26 put, where nearly all of the 5,000-plus contracts that have crossed the tape have done so at the ask price. What's more, IV has edged higher at the strike and volume exceeds open interest, reflective of buy-to-open activity. These positions represent longer-term bets that INTC will stumble over the next five months, moving below the 26 strike before October options expire. Specifically, breakeven (at expiration) for these put buyers stands at $24.84, or the strike price less the volume-weighted average price of $1.16.

Meanwhile, INTC options premiums -- especially among short-term series -- are revisiting historical lows. The stock's Schaeffer's Volatility Index (SVI) of 15% is lower than all other readings taken over the past year. In a similar vein, Intel's 30-day at-the-money IV notched a new annual low of 14.8% earlier today.

Intel Corporation (NASDAQ:INTC) shares are little changed in 2014 -- up roughly 1.7% -- but recently bounced off support from their 40-day moving average. Off the charts, Intel will hold its annual shareholder meeting next Thursday, May 22.


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