Intel Corporation (INTC) Traders Brace for a Post-Earnings Plunge

Intel Corporation (INTC) will report earnings after the close on Thursday, Jan. 15

Jan 6, 2015 at 10:39 AM
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Although Intel Corporation (NASDAQ:INTC) has averaged a single-session post-earnings gain of 1.2% over the past four quarters, short-term speculators have shown a growing affinity for puts over calls in the lead-up to the company's upcoming quarterly report -- due after the close next Thursday, Jan. 15.

Specifically, since the start of the calendar year, put open interest among options set to expire in three months or less has edged up 2.1%. What's more, the equity's current Schaeffer's put/call open interest ratio (SOIR) of 1.29 ranks just 2 percentage points from a 52-week peak, meaning near-term traders have rarely been as put-skewed as they are now.

On Monday, INTC puts crossed the tape at a rate 1.4 times the average daily pace, and, according to the equity's 30-day at-the-money implied volatility -- which jumped 6.4% to 28.2% -- short-term contracts were in high demand. Buy-to-open activity was detected at the stock's weekly 1/9 36.50-strike, weekly 2/6 34-strike, and February 31 puts. By initiating these long puts, speculators expect INTC to be sitting south of the strike prices at the respective expiration dates.

Technically speaking, Intel Corporation (NASDAQ:INTC) has been a standout over the past 52 weeks, boasting a gain of 40%. More recently, the stock has been testing its mettle near the $36 mark, an area that currently coincides with INTC's 40-day moving average, as well as a lofty accumulation of put open interest in the January series of options. Today, the shares are trading slightly lower -- down 0.4% at $35.80 -- as the firm's CEO Brian Krzanich prepares to give a keynote address at the Consumer Electronics Show later this afternoon.


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