Options Bulls Unfazed by Choppy Intel Stock

Intel stock has exceeded year-over-year volatility expectations

Digital Content Manager
Jun 21, 2021 at 3:12 PM
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Blue chip semiconductor name Intel Corporation (NASDAQ:INTC) is brushing off a price-target cut from Citigroup to $60 from $65 this afternoon. The brokerage firm noted component shortages are leading to PC supply chain push-outs, adding it "remains concerned there has been excess inventory built and/or lower demand forecast." In response, the analyst in question also lowered revenue and earnings for INTC, while predicting downside risks for the rest of the chip industry. At last check, Intel stock remains up 0.5% at $55.92.

Despite Citigroup's grim outlook, Intel stock just made an appearance on Schaeffer's Senior Quantitative Analyst Rocky White's list of stocks that have attracted the highest weekly options volume within the last two weeks, with new names highlighted in yellow. More specifically, 374,178 weekly calls and 79,719 weekly puts have been exchanged during this time, a heavy call bias that's worth a second look.

MAO 621

Digging deeper, is a ways off its April 12, annual high of $68.49. The shares gapped lower to the $54 level late April thanks to headwinds stemming from the well-publicized semiconductor shortage. Since then,  INTC has been struggling with overhead pressure at the $58 mark, which coincides with its 50-day moving average. Over the last six months, however, the equity has added 20.6%.

INTC 50 Day

Analysts are overwhelmingly bearish towards Intel stock, with 19 of the 27 in coverage carrying a tepid "hold" or worse rating, while the remaining eight say "buy" or better. Meanwhile, the 12-month consensus target price of $64.72 is a 15.8% premium to current levels, indicating more price-target/cuts or downgrades could be coming.

Now seems like a good opportunity to weigh in INTC's next move, per its Schaeffer's Volatility Index (SVI) of 26%, which stands in the 20th percentile of readings from the past year. This implies that options players are currently pricing in relatively low volatility expectations. Furthermore, the security's Schaeffer's Volatility Scorecard (SVS) sits at at 82 out of 100, meaning Intel stock has exceeded option traders' volatility expectations during the last 12 months.

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