Extreme Call Activity on Intel Before Earnings

Open interest among contracts expiring within three months is extremely call-heavy

Jan 24, 2019 at 2:07 PM
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Intel Corporation (NASDAQ:INTC) call volume is running in the 99th annual percentile, while almost tripling the number of puts traded today. The February 52.50 call -- home to peak open interest -- is most popular today, followed by the March 52.50 call.

This call preference is part of a longer-term trend on INTC, which has a Schaeffer's put/call open interest ratio (SOIR) at 0.48, in the lowest percentile of its annual range. In other words, short-term options traders are much more call-skewed than normal.

All this comes as the chipmaker prepares for its earnings release later today. On the whole, the options market is pricing in a 6.7% swing for the shares in tomorrow's trading. The stock was last seen trading up 2.9% at $49.34, meaning a move of this magnitude to the upside would put Intel just above $52.50, territory not seen since a July bear gap. To the downside, the equity would be trading around $46.

As for analyst sentiment on the blue chip, most brokerage firms are actually skeptical, with 15 of 29 handing out "hold" or worse recommendations, This setup leaves the door open for a round of bull notes in the case of an impressive turn in the earnings spotlight. Last quarter, INTC rose 3.1% the day after earnings.

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