M&A Speculation Fuels Bullish Betting on Intel Corporation (INTC)

Intel Corporation (INTC) calls are trading at an accelerated clip today

by Karee Venema

Published on Mar 30, 2015 at 1:45 PM
Updated on Apr 20, 2015 at 5:32 PM

Intel Corporation (NASDAQ:INTC) shot higher on Friday afternoon, amid reports the chipmaker has its sights set on Altera Corporation (NASDAQ:ALTR) -- the latter of which got handed a plate full of bearish backlash this morning. Today, INTC has pared a portion of these gains -- down 0.9% at $31.72 -- but options traders think another end-of-week surge is on the horizon.

Taking a quick step back, INTC calls are trading at 1.6 times the average intraday pace, with the equity's weekly 4/2 31.50 strike popular among today's speculators. It seems safe to assume buy-to-open activity is happening here, as traders roll the dice on the stock extending its lead north of $31.50 through Thursday's close, when the weekly series expires.

Although INTC calls have received increased attention of late, the withstanding trend has been toward puts. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day put/call volume ratio of 0.96 ranks in the 83rd annual percentile. In other words, puts have been bought to open over calls at a faster-than-usual clip in recent months.

Technically speaking, Intel Corporation (NASDAQ:INTC) has put in a strong performance over the long term, boasting a nearly 23% year-over-year gain. As a point of reference, the Dow has tacked on slimmer 9.4% over that same time frame. Should the shares resume this uptrend, a continued shift in sentiment among options traders could translate into fresh tailwinds for INTC.

Weekly Chart of INTC Since March 2014

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