Intel shares fell 4 percent Thursday after the chip maker reduced its outlook, and the sudden move lower has created an instant windfall for one or more options traders who made exceptionally well-timed bets earlier this week.
On Monday, on seemingly little news, traders made a series of bearish bets that would only pay off if Intel's stock took a sharp, short-term dive. Many of the options purchased have more than doubled in value in just a matter of days.
"The put buying on Monday was curious," said Dan Nathan, a CNBC contributor who first wrote about the flurry of activity on his blog, RiskReversal.com.
"The choice of expiration in March and April 2nd weeklies captures no scheduled events. They were just making bearish bets," he told CNBC.
Specifically, on Monday, 12,000 of the March 32.50-strike puts, 11,000 of the March 31.50-strike puts and an additional 8,000 April 2 weekly 32-strike puts traded hands.
The largest single block of the day was a purchase of 4,000 March 31.50-strike puts, for 22 cents per share. With Intel's 4 percent decline, those puts were trading for 72 cents Thursday afternoon. Since each options contract controls 100 shares of stock, that single trade alone has generated $200,000 in profits in less than three trading days.