Intel Corporation (INTC) Options Catch Fire on Guidance-Induced Highs

Intel Corporation (INTC) is fresh off a 15-year high, boosted by upbeat guidance

by Alex Eppstein

Published on Sep 16, 2016 at 10:41 AM

Intel Corporation (NASDAQ:INTC) is the top gainer on the Dow, after the chipmaker boosted its quarterly revenue guidance due to signs of improving PC demand. At last check, the shares were up 2.1% at $37.32 on extremely heavy volume, and earlier they hit a 15-year high of $38.05. Meanwhile, the stock's options pits are running wild.

By the numbers, 72,000 contracts are on the tape -- five times the expected intraday options volume, and in the 99th annual percentile. Leading the way is the weekly 9/23 37-strike put, where it looks like traders are buying new positions. If this is the case, these speculators foresee INTC pulling back below $37 by next Friday's close, when the weekly series expires.

Meanwhile, eleventh-hour option bulls are buying to open the September 38 call. By doing so, they're gambling on INTC muscling atop $38 by tonight's close -- and, perhaps, notching even higher multi-year highs.

Generally speaking, bulls have had a definitive advantage in the options pits. During the past 50 sessions across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), traders have bought to open 2.12 Intel calls for every put -- a ratio ranking in the 96th percentile of its annual range.

Echoing this bias toward calls is INTC's Schaeffer's put/call open interest ratio (SOIR). At 0.50, the SOIR indicates call open interest doubles put open interest among options with a shelf-life of three months or less. Plus, this ratio rests below 92% of all readings taken in the past year.

It isn't necessarily surprising to see so much confidence surrounding Intel Corporation (NASDAQ:INTC). Clearly, based on today's highs, the stock is a long-term outperformer, and shows no signs of slowing down. To put things further into perspective, over the past three months alone, INTC has outperformed the broader S&P 500 Index (SPX) by 10 percentage points.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

A Schaeffer's exclusive

6 Sectors for Summer

Access your FREE insider report before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.
Wall Street Reclaims Two Key Trendlines This Week
U.S.-China tensions and dire economic data still weigh, though
Dell Stock Jumps on Upbeat First Quarter
DELL announced an upbeat first-quarter report
The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.