Intel Corporation (INTC) Calls Hot as M&A Rumors Get Squashed

Intel Corporation (INTC) and Altera Corporation (ALTR) have ended acquisition talks

by Karee Venema

Published on Apr 9, 2015 at 11:02 AM
Updated on Apr 20, 2015 at 5:32 PM

Calls have taken the early lead in Intel Corporation's (NASDAQ:INTC) options pits. Specifically, the contracts are trading at 1.6 times what's typically seen at this point in the day, and are outpacing puts by a 2-to-1 margin.

Most active is INTC's weekly 4/10 31-strike call, where about 10,000 contracts have changed hands thus far. It seems safe to assume new positions are being purchased here -- a theory echoed by data from the International Securities Exchange (ISE) -- meaning traders expect INTC to extend its lead north of $31 through Friday's close, when the series expires.

From a wider sentiment perspective, speculation over a possible takeover of Altera Corporation (NASDAQ:ALTR) has sparked a rush of bullish betting on INTC in recent weeks. At the ISE, Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 10-day call/put volume ratio has jumped to 2.94 from 1.19 over the past two weeks, and now rests in the 91st annual percentile.

Today, despite reports that talks with ALTR have dissipated, INTC is still seeing accelerated call activity. Meanwhile, the stock is down 0.2% at $31.26 -- but finding support atop its 320-day moving average. Longer term, Intel Corporation (NASDAQ:INTC) has tacked on 18.3% over the past 52 weeks.

Daily Chart of INTC Since April 2014 With 320-Day Moving Average

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