Huge, Unusual Put and Call Option Volume in Intel - Investors Bullish as INTC Drops

A Barchart report has revealed a striking increase in out-of-the-money put and call option trading for Intel Corp. (INTC), suggesting potential bullish sentiment among investors despite recent stock declines. The stock is trading around $87.42, near its 3-month low of $81.88 from July 29. This trend has led to a surge in unusual option volume.

The Barchart Unusual Stock Options Activity Report indicates over 11,000 put contracts traded at the $65.00 strike price expiring on October 2, which is more than 61 times the prior volume. This level of activity suggests investors are selling puts to collect income while simultaneously buying calls. The put option income, valued at approximately $660,000, appears to have partially covered the cost of purchasing call options, amounting to $1.284 million.

Analysts have raised their price targets for INTC, with an average target of $114.88, representing an estimated upside of 31%. Using analysts' revenue projections and an estimated 8.5% free cash flow margin, the fair market value is estimated at $595 billion, 28.4% higher than the current market cap of $463.29 billion. The article highlights the potential risks of this speculative trade, as a short-term call option could result in a 100% loss of capital.