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Intel Sees Heavy Upside Options Action

Friday, 30 Oct 2009 | 8:04 AM ET

The focus may be on the dollar and commodities these days, but the tech sector has been the leader in the last two earnings cycles—and Intel has been the engine that helped push each quarter.

The leading chipmaker was up only slightly yesterday but saw some heavy options activity to the upside. Traders were focused on the December 19 calls, where 18,917 contracts traded at roughly nine times the open interest at the strike.

Most of the calls changed hands in a strong buying pattern for premiums between $0.85 and $1, according to OptionMonster's real-time tracking systems. The average volume for those calls has been just 216 a day for the last month, and overall calls at all strikes outnumbered puts by about 2.5 to 1.

Intel rose 1 percent to close at $19.22 but still closed well below its 50-day moving average. The stock spiked to $21.27 after reporting strong earnings Oct. 14 but has since fallen back to levels where it was trading before that release.

Those lower prices may be a key reason behind yesterday's call buying, especially because Intel and many other technology names have forecast continued strength ahead.

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Intel Competes With:

Advanced Micro Devices

Texas Instruments

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Options Trading School:

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Disclosure:

Najarian is long INTC stock.

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Pete Najarian is a professional investor, CNBC contributor, regular co-host of CNBC's "Fast Money" and co-founder of OptionMonster.com.

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Disclaimer

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