Intel Options (INTC): Unusual Trading Activity
Options in chipmaker Intel are showing enormous options activity today.
Since Intel’s disappointing earnings a few weeks ago, it’s been on a rollercoaster ride.
In fact, after its earnings, the stock plummeted to a low of $27.24 before rebounding. And today it’s trading back above its pre-announcement level at $29.22.
Here’s the thing… option traders think something is wrong with this sudden run-up.
More specifically, one option trader came in right at the open and purchased 20,000 contracts of the INTC June $29 strike puts at an average price of $1.00 a piece.
He actually spent $2,000,000 betting this stock is going to stop moving higher and again begin falling in price.
Remember, buying put options outright is a strategy used when a trader feels a stock is going to decline in value.
So, what’s behind this huge purchase of put options?
As most of you know, Intel is the world’s largest chipmaker based on revenue and unit shipments.
The company is also known for its dominant market share in microprocessors for personal computers (PCs).
I think this large put activity is due to nothing more than a large institution or hedge fund thinking INTC is technically at the top of its trading range.
We’ll wait and see if that holds true in this case.
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Category: Unusual Options Trading Activity
