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Halftime: What's Driving Unusual Options Action In Intel?

Options traders on Monday aggressively bought the July 25 calls in Intel, trader JJ Kinahan reports. The call buying suggests options traders are making a bullish bet on Intel.

Like Microsoft , Intel is an older company whose stock doesn't seem to be going anywhere, Kinahan said.

Intel's chip maker segment, however, is reportedly talking with several telephone companies. Although unfounded, the rumor suggests some upside going forward and is thereby creating unusual options activity.

By midday trading on Monday, Intel's stock was the top gainer in the Dow.

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CALL OF THE DAY: CITI UPGRADES FORD MOTOR

Citi has become more bullish on pricing within the auto sector, reports CNBC's Melissa Lee. It expects Ford Motor to be a key beneficiary.

Following the natural disasters that hit Japan in March, there will be fewer Japanese models available through year-end. Citi analyst Itay Michaeli said the pricing environment in the auto industry has been improving overall, but he thinks Ford's pricing power will be helped by the Japan model shortages in addition to currency issues, restructuring in the industry and low inventory. Citi upgraded Ford to a 'buy' on Monday.

Renown hedge fund manager Leon Cooperman said last week he's bullish on General Motors, even though there's a government overhang. Stuart Frankel's Steve Grasso said people don't like the overhang and would rather go with Ford. Grasso said Ford has always been the turnaround story.

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Trader disclosure: On May 16, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephen Weiss is short (AKS). Stephen Weiss is short (X). Stephen Weiss owns (DVN), (COP), (QCOM), (BRCM), (TEVA), (KO), (RIG), (HK), (AKAM), (UUP), (DE), (UAL), (MRK), (HBAN), (KEY) and (JPM). Steven Grasso owns (AKS), (AMD), (ASTM), (BA), (BAC), (C), (D), (HOV), (JPM), (LIT), (LPX), (MHY), (NDAQ), (PFE), (PRST), (AKS), (AMD), (ASTM), (BA), (BAC), (C), (D), (HOV), (JPM), (LIT), (LPX), (MHY), (NDAQ), (PFE) and (PRST). JJ Kinahan owns (C). JJ Kinahan owns (F), is short (F) calls. JJ Kinahan owns (GE), is short (GE) calls. JJ Kinahan owns (MSFT), is short (MSFT) calls. JJ Kinahan is short (SLV) calls . JJ Kinahan is short (SPY) options. Zachary Karabell owns (AAPL), (GE), (GOOG), (RIMM) and (SLV).

Steven Grasso
Stuart Frankel & Co and it’s partners own (ABX)
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MSFT)
Stuart Frankel & Co and it’s partners own (MU)
Stuart Frankel & Co and it’s partners own (NEM)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners are Short (QQQQ)
Stuart Frankel & Co and it’s partners are short (AAPL)

Zachary Karabell
River Twice Capital owns (QCOM)
River Twice Capital is short (LCC)
River Twice Capital is short (SPY)
River Twice Capital is short (QQQ)

Itay Michaeli
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of Ford Motor Co, Johnson Controls Inc, Meritor Inc. This position reflects information available as of the prior business day.
Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Borg Warner Inc, Ford Motor Co, Goodyear Tire & Rubber Co, Johnson Controls Inc, Tower International, Inc..
Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Borg Warner Inc, Ford Motor Co, Goodyear Tire & Rubber Co, Johnson Controls Inc, Lear Corporation, Meritor Inc, Tower International, Inc..
Citigroup Global Markets Inc. or its affiliates expects to receive or intends to seek, within the next three months, compensation for investment banking services from Ford Motor Co, Johnson Controls Inc.
Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Borg Warner Inc, Ford Motor Co, Goodyear Tire & Rubber Co, Johnson Controls Inc, Lear Corporation, Magna International Inc, Meritor Inc, Tower International, Inc. in the past 12 months.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Meritor Inc, Tower International, Inc., Goodyear Tire & Rubber Co, Borg Warner Inc, Ford Motor Co, Johnson Controls Inc, Lear Corporation.
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, securities-related: Borg Warner Inc, Ford Motor Co, Goodyear Tire & Rubber Co, Johnson Controls Inc, Lear Corporation, Magna International Inc, Meritor Inc, Tower International, Inc..
Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, non-securities-related: Borg Warner Inc, Ford Motor Co, Goodyear Tire & Rubber Co, Johnson Controls Inc, Lear Corporation, Magna International Inc, Meritor Inc, Tower International, Inc..
Citigroup Global Markets Inc. or an affiliate received compensation in the past 12 months from Meritor Inc, Tower International, Inc., Goodyear Tire & Rubber Co.
Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues.

CNBC.com with wires.

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