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Mike Khouw Sees Unusual Options Activity In Intel

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Mike Khouw Sees Unusual Options Activity In Intel

On CNBC's "Options Action," Mike Khouw said that Intel Corporation (NASDAQ: INTC) traded about two times as many calls as puts on Wednesday. The options market is implying a move of 6.6% ahead of the earnings report, scheduled for Thursday after the bell.

During the session, one trade caught Khouw's attention. He noticed that someone bought 1,000 contracts of the July $50/$70 risk reversal for a credit of around 80 cents. The trader sold July $50 puts and used the proceeds to buy the July $70 calls.

The trade is going to make a profit of 80 cents if the stock closes between $50 and $70 at the July expiration. Above $70, it is going to make additional profit on a long call position. The trade is going to lose money below $49.20. If the stock closes below $50 at the July expiration, the trader is going to have to buy the stock for $50.

 

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Posted-In: CNBC Mike Khouw Options ActionOptions Markets Media