Dan Nathan Gives Intel's Earnings Preview

CNBC Options Action's Dan Nathan spoke on the show about Intel Corporation INTC ahead of the earnings report. He said that the focus of the earnings report is going to be about its 1Q guidance after the acquisition of Altera.

The options market is implying a 4.5 percent one day move and its average move over the last four quarters is 2.5 percent. He explained that a purchase of the January, this Friday expiration, 32 put and 32 call would cost $1.50. The breakeven for the trade is at $30.50 on the downside and at $33.50 on the upside. The buyer of this options structure called straddle needs a 4.5 percent move higher or lower to make money on the trade.

Nathan is leaning on the short side of the trade and he wants to make a bearish bet with defined risk.