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Option Traders See a Steady Ascent for Intel Corporation (INTC)

INTC fans are flocking to June-dated call options

by 3/27/2013 12:21 PM
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Blue-chip tech concern Intel Corporation (NASDAQ:INTC - 21.89) is squaring off with familiar resistance in the $22 region, which has rejected most of the stock's rally attempts in 2013. Nevertheless, options traders are rolling the dice on a slow and steady uptrend for the shares, as evidenced by today's affinity for INTC's June-dated calls.

Around midday, INTC has seen roughly 74,000 calls change hands, more than tripling its average intraday volume. For comparison, just around 35,000 Intel puts have traded thus far.

Most active by a mile is the equity's out-of-the-money June 23 call, which has seen more than 27,000 contracts cross on open interest of fewer than 11,000 contracts, pointing to an influx of fresh initiations. Plus, most of the calls traded in a block of nearly 16,000 contracts at the ask price of $0.26, suggesting they were bought.

In order to profit on the play, the buyers need INTC to muscle atop the $23.26 level (strike plus premium paid) before June 21, when the options expire. In order to achieve this, though, Intel Corporation needs to topple the aforementioned $22 marker, as well as its psychologically significant 200-day moving average, which has descended into the $22.80 neighborhood. However, even if the stock remains south of the strike, the most the buyers can lose is the initial premium paid for the calls.

Daily Chart of INTC since September 2012 with 200-Day Moving Average

According to recent reports, Intel is negotiating with multiple media outlets to purchase the rights of TV shows and movies for its online TV service.


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