Semiconductor manufacturer
Intel (INTC) has underperformed its peers over the past year, as the company spends billions of dollars on constructing new foundries. One trader is betting shares will continue to underperform for the next two years.
That’s based on the June 2026 $25 puts. With 777 days until expiration 1,907 contracts recently traded, a 15-fold increase over the option’s open interest of 129 contracts. The buyer of the puts paid $2.90 to make the bearish bet.
Intel shares recently traded for just over $30, so they would need to drop by $5, or about 20%, for the option to move in-the-money.
Intel hit a 52-week high of just over $51 in December, and has been trending lower since.
The most recent earnings showed an increase in revenues, but Intel is spending considerable sums to build out new chip fabrication plants. The first of the new plants won’t be open until late 2025, assuming no delays.
Shares may be a compelling long-term buy, but short-term construction costs could keep shares trending lower for now.
Action to take: Interested investors should hold off for now. Shares may continue to trend lower for some time.
For traders, the June 2026 puts could see mid-to-high double-digit returns. It’s likely shares will bottom and start to turn around well before the option expires, but this specific option has plenty of time for the current downtrend to play out.
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.