Why Intel Stock is Weighing on the Dow

Options players are flocking toward the equity

Deputy Editor
Jan 22, 2021 at 11:18 AM
facebook twitter linkedin

The shares of Intel Corporation (NASDAQ:INTC) are near the bottom of the Dow today, last seen down 8.4% at $57.42. This comes even after the semiconductor powerhouse reported fourth quarter earnings and revenue that bested Wall Street's forecasts, fueled by a strong demand for personal computers and laptops during the pandemic-laden year. It seems like the reason for today's plunge can be chalked up to a combination of profit-taking and an early-morning cyber hack to the company's corporate webpage.

Nevertheless, no fewer than 14 brokerage firms have issued bull notes, the loftiest of coming from J.P. Morgan Securities to $80. Coming into today, 17 of 28 firms sported "hold" or worse recommendations, which means Intel stock was well overdue for a round of upgrades. Today's slew of price-target hikes may not be the last, too, as INTC's average 12-month price target stands less than 2.9% above current levels.

The first month of 2021 has already been an eventful one for INTC. A bull gap launched the equity to as high as $63.95 by Jan. 21, essentially filling the sharp 16.2% post-earnings bear gap from July. Even amid today's breather, the shares are up 15% already in 2021. 

Options traders are ramping up their presence today. Already, over 124,000 calls and 84,000 puts have been exchanged so far -- total volume that's triple what's normally seen at this point. Most popular is the weekly 1/22 59-strike call, with new positions being opened there, followed by the 59-strike put from the same series. 

Now looks like a good time to weigh in on Intel stock with options amid a post-earnings volatility crush. The equity's Schaeffer's Volatility Index (SVI) of 39% sits in the low 19th percentile of its annual range. In other words, INTC currently sports attractively priced premiums.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Stock Pick Report


Special Offers from Schaeffer's Trading Partners