Intel Corporation (INTC) Acquisition Met with Skepticism

Intel Corporation (INTC) has struggled to win the confidence of options traders

Jun 1, 2015 at 1:31 PM
facebook twitter linkedin


Intel Corporation (NASDAQ:INTC) is down 1.4% at $34, after the company agreed to buy Altera Corporation (NASDAQ:ALTR) for $16.7 billion in cash -- confirming earlier speculation. Meanwhile, intraday options volume has popped to 1.5 times the expected amount.

Seeing possible buy-to-open activity is INTC's July 34 put. By purchasing these at-the-money contracts, speculators anticipate the shares will breach $34 by the close on Friday, July 17, when back-month options expire.

This pessimism is reflected by longer-term data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Specifically, INTC's 10-day put/call volume ratio of 1.25 ranks in the 84th percentile of its annual range. Along the same lines, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.32 outstrips 96% of comparable readings from the past year.

Technically speaking, however, Intel Corporation (NASDAQ:INTC) has been trending upward over the long term. Year-over-year, the shares have advanced 25%, and even today's dip has been contained by their 160-day moving average -- a trendline that served as resistance in early 2015. Should INTC reverse higher, an unwinding of bearish options positions could translate to upside.

What This Election Year Means for Stocks

Ipad with I voted sticker

  


 
Special Offers from Schaeffer's Trading Partners