Schaeffer's Options Update: Straddling Intel Corp. Ahead of Earnings

Mon Jul 13, 2009 3:10pm EDT

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CINCINNATI--(Business Wire)--
Intel Corp. (NASDAQ: INTC) has seen call volume soar heading into the company's
quarterly earnings report. For the record, the semiconductor giant is slated to
enter the earnings confessional after the close on July 14, with Wall Street
looking for a profit of 8 cents per share. Options traders are betting big ahead
of the event, with more than 24,000 calls changing hands so far today. Nearly
half of this call volume has traded on INTC's near-the-money July 16 strike,
with more than 10,000 contracts crossing on open interest of 51,325 contracts,
according to our Intraday Volume Explosion List.

Digging into this volume, I noticed that a block of 200 contracts traded on the
International Securities Exchange (ISE) at 11:20 a.m. Eastern time for the ask
price of $0.35. Furthermore, this block was marked "straddle." As you would
expect with a straddle position, I found the other half of this trade at INTC's
July 16 put, where a block of 200 contracts changed hands at the same time on
the same exchange for the ask price of $0.51. By implementing this strategy, the
trader needs INTC to move sharply by the time these options expire on Friday;
direction doesn't matter.

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Schaeffer's Investment Research
Joseph Hargett, 513-589-3800
jhargett@sir-inc.com