We’re seeing some very bullish call option activity in Intel (INTC) options ahead of their earnings report this afternoon. Traders are buying 4 calls for every put. The extreme bullishness might be a bit misplaced however.
INTC – Intel Corp. – Shares of the chip maker are trading 1.5% higher this morning to a new 52-week high of $21.29 ahead of the firm’s scheduled earnings release after the final bell. Option traders exchanged more than 111,800 contracts on the stock by 10:18 am (EDT) and revealed a strong preference for call options. Calls changed hands roughly four times for each single put option traded. Option implied volatility is slightly lower by about 3% to 32.65%.
Although the latest data from the SIA showed very strong year over year strength in chip sales more recent trends have not been as robust. Merrill’s recent downgrade and Dell’s sizable earnings miss just a few weeks ago appear to be distant memories. Merrill’s latest report is calling for a revenue miss. We’ll see who is on the right side of the trade in a few hours.
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.