Intel Stock in Focus After Billion-Dollar Memory Business Sale

INTC options ae affordably priced at the moment

Digital Content Manager
Oct 20, 2020 at 9:47 AM
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The shares of Intel Corporation (NASDAQ: INTC) are off by 0.6% at $54.58 at last check, after the tech giant announced it will sell its solid state drive (SSD), NAND memory chip product, as well as its facility in Dalian, China, to South Korean chipmaker SK Hynix for about $9 billion in an all-cash transaction. An initial $7 billion will be paid by the first closing date in late 2021, while another $2 billion will be paid by the second closing date in March 2025.

NTC is set to snap three-day win streak, while the rally yesterday stopped just short of its 200-day moving average. The shares are still recovering from a sharp post-earnings bear gap of 16.2% back in late-July, although the $49 area stepped up as support for the last three months.

Analysts are still pessimistic towards the equity. Of the 24 in coverage, 18 carry a tepid "hold" or worse rating, while the remaining six call the stock a "strong buy." Meanwhile, the 12-month consensus target price of $56.73 is just a 3.5% premium to current levels.

The options pits tell a completely different story, with calls popular. Intel stock sports a 50-day call/put volume ratio of 4.64 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the highest percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late. 

Today's more of the same, with 20,000 calls flying off the shelves in just the first hour of trading. Most popular by a wide margin is the November 57.50-strike call, while new positions are also being opened at the November 59 call.

Now is certainly a good time to weigh in on INTC options. This is per the security's Schaeffer's Volatility Index (SVI) of 41% sits in just the 25th percentile of all other annual readings, meaning the stock sports attractively priced premiums at the moment. 

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