Intel Options (INTC): Unusual Trading Activity

| July 11, 2012 | 0 Comments

INTC OptionsOptions in mega-cap chipmaker Intel (INTC) showed enormous activity yesterday.

Since Intel reported disappointing earnings last quarter, the stock’s been on the outs with investors.

After its earnings, Intel plummeted from a high of just above $29 a share to a low of $25 a share.  Today, the stock is still trading just above its lows at $25.56.

And guess what?  Their next earnings announcement is set for July 17th.  Right before July options expiration.

But, while retail investors may be nervous, option traders are embracing this decline by jumping in on the weakness.

More specifically, one option trader came in right before the close and purchased nearly 16,000 contracts of the INTC July $27 strike calls at an average price of $0.11 a piece.

This represents a $176,000 bet that this stock is going to move higher on their upcoming earnings.

Don’t forget… buying call options outright is a strategy used when a trader feels a stock is going to rise in value.  And it gives a trader unlimited upside potential.

So, why’s INTC still worth this big bet?

As most of you know, Intel is the largest chipmaker in the world.  They manufacture microprocessors and platform solutions for the global personal computer market.  

Not only that, Intel has sustained its position at the forefront of technology by investing heavily in R&D.  As a result, the company holds roughly 80% market share in the global microprocessor space.

But most importantly, INTC sports powerful brand recognition.  You see, the company subsidizes marketing efforts by customers when they highlight their brand… making this coalition very profitable.

Bottom line…

Let’s not forget one of the keys I’ve noticed in my many years of trading options.  These traders are usually right more often than they’re wrong!

For more detailed information on unusual options activity and how you can profit from it, be sure to sign-up for our daily newsletter, Options Trading Research.  It’s always 100% free and packed full of option trading ideas you can use immediately in your own portfolio.  Click here to subscribe for free.

Safe Trading,

Marcus Haber

Tags: , , , , ,

Category: Unusual Options Trading Activity

About the Author ()

Marcus Haber is the co-editor of Options Trading Research and boasts well over a decade of real-life options experience. Learning from some of the biggest names in the business, Marcus has served as an Options Strategist for a number of firms and was also appointed to the Options Advsiory Board with Pershing, a branch of the Bank of New York.