Chipmaker Intel (INTC) is down 52% over the past year as the company has failed to capitalize on demand for chips that can power the AI revolution. One trader sees shares trending lower in the weeks ahead.
That’s based on the March 14 $22 puts. With 28 days until expiration, 10,107 contracts traded compared to a prior open interest of 102, for a 99-fold rise in volume on the trade. The buyer of the puts paid $1.22 to make the bearish bet.
Intel shares recently popped higher to just over $22 on bullish news about U.S chip production, making this an at-the-money trade. Intel hit a 52-week low of $18.51 in early January before its recent bounce higher.
Operationally, Intel’s failures have been well known. Revenues dropped 6% in the past year, adding to declines from prior years. And overall earnings growth was negative.
Action to take: Intel shares have popped higher enough in recent sessions that they will likely face a pullback in the weeks ahead. Interested investors can start to buy shares now, but look for an opportunity to add to that position over time.
At current prices, Intel pays a 2.2% dividend.
For traders, the March $22 puts are well positioned given the recent pop higher in shares, which may fade over the coming weeks. Traders can likely see mid-to-high double-digit returns before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.