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Is Intel Corporation (INTC) doing business with Apple Inc. (AAPL)?
There's a call-buying frenzy in Intel Corporation's (NASDAQ:INTC) option pits. VentureBeat has reported that the smartphones Apple Inc. (NASDAQ:AAPL) releases in 2016 will use Intel-produced modem chips, and INTC call contracts are crossing at four times the average intraday pace and account for four of the five most popular contracts.
The option seeing the most activity is the March 33.50 call, where nearly 28,000 contracts have changed hands. It seems new positions are being purchased here, as traders bet on the shares to eclipse $33.50 before the close next Friday, March 20, when front-month options expire.
Generally, it's been put buying that's dominated INTC's options pits, according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The stock's 10-day put/call volume ratio of 1.54 across those exchanges ranks in the 90th percentile of its annual range.
Reinforcing this is INTC's Schaeffer's put/call open interest ratio (SOIR) of 1.11, meaning put open interest outstrips call open interest among stocks expiring within three months. What's more, this ratio is higher than 70% of all readings from the past year.
Changing focus to the Street, analysts are split on the shares. Sixteen covering brokerage firms call INTC a "strong buy," yet 15 others have handed out "hold" or worse ratings.
Intel Corporation (NASDAQ:INTC) has been strong on the charts in the past year, adding nearly 32%, including a 2.9% increase today to trade at $32.62. Plus, the stock's 14-day Relative Strength Index (RSI) stands at 31 -- near oversold territory, meaning the shares may have been poised for a short-term bounce. Should the equity extend its long-term uptrend, a mass exodus of option bears or a flood of upbeat analyst attention could propel the shares higher.