Intel (INTC) is off 53 cents to $26.02 and one of 28 Dow stocks trading lower Friday. An interesting four-way spread traded on the chipmaker on the ISE today, after one strategist bought a July 25 – 27 bearish risk-reversal on INTC for 2 cents, 33,400X, and sold the Oct 25 – 27 bullish risk-reversal at 17 cents, 33,400X. The activity probably rolls a position opened in early-February when the July bullish combo traded for 11 cents (see 2/6 color). Shares are down 4.3 percent since that time and, with two weeks left until the July expiration, the investor is now buying a few more months for the bullish position to play out. ISEE confirms that the July risk-reversal was closing and a new similar position opened in October. Intel will report earnings the afternoon of July 17. [$26.02 -0.53, IV=26.0% +0.9]
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.