Intel Is The Story

  • July 17, 2001
  • Jon Najarian

Options activity in Intel
(
INTC |
Quote |
Chart |
News |
PowerRating) has been brisk all day, ahead of tonight’s earnings announcement. The near-term July options are trading for 93%, while the August options are down around Intel’s normal volatility of 53%. 

Actual prices for July 27 1/2 calls are $1.90 and $2.70 for the August 27 ½ calls. A play that some traders are going to be making today is buying the time spread (also known as a calendar spread), in which they buy the August and sell the same strike July for much cheaper than if both options were trading at the same volatility. Buying that 27 1/2 time spread for $.80 is a cheap way to be in the game with defined risk, our usual formula for investing success.Â