Most Active Options Update: Intel Corporation (INTC)

Put players are targeting Intel Corporation today

by Karee Venema

Published on Oct 30, 2014 at 10:56 AM
Updated on Apr 20, 2015 at 5:32 PM

The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest today is chipmaker Intel Corporation (NASDAQ:INTC), as both long- and short-term traders brace for additional losses.

Most Active Options Table

Intel Corporation is off 2.7% today -- the biggest loser on the Dow thus far -- amid a sector-wide slump in semiconductor stocks. The quick move to the downside has prompted a rush of put activity in the equity's options pits, with volume running at two times the average intraday pace. Diving deeper reveals both short- and long-term traders are rolling the dice on steeper losses for INTC.

Short-term option bears have set their sights on the stock's weekly 10/31 33.50-strike put, where 9,718 contracts have changed hands -- mostly at the ask price, hinting at buyer-driven activity. Implied volatility is up 15.5 percentage points, and only 1,842 contracts reside here, making it safe to assume new positions are being initiated (a theory echoed by Trade-Alert). Based on INTC's current perch at $32.98, the puts are in the money. According to the option's delta of negative 0.79, there's a strong probability INTC will be docked south of the strike at tomorrow's close, when the weekly series expires.

Receiving the most attention thus far, though, is INTC's January 2015 32-strike put, where 11,326 contracts have crossed the tape. The majority of this action occurred when a block of 9,173 contracts appears to have been bought to open for $1.04 apiece, resulting in an initial net debit of about $954,000 (number of contracts * premium paid * 100 shares per contract). This is the most the put buyer stands to lose, should the security be north of the strike when the January options expire. Gains, meanwhile, will accumulate on a move south of breakeven at $30.96 (strike less premium paid).

Today's accelerated put activity marks a change of pace in Intel Corporation's (NASDAQ:INTC) options pits -- with call buying growing increasingly popular in recent weeks amid the stock's attempt to rebound from its post-earnings plunge. In fact, since the company reported earnings on Oct. 14, INTC's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio has risen to 2.70 from 1.89, and is now ranked in the bullishly skewed 69th percentile of its annual range.


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