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Another post-earnings disaster for Intel? Options traders are betting on disappointment

Options Action: Intel earnings

Intel shares dropped a whopping 16% in the session following the company's last earnings report in July, and the stock still sits some $7 below the levels from which it fell.

It's been a rough period for the chipmaker, which has failed to capture the momentum of the broader semiconductor space. But can the stock embark on a turnaround when it reports after the bell on Thursday? Options traders aren't betting on it.

"Right now, the options market is implying a move of about $3 by the end of the week, higher or lower. That's about 5.6% of the current stock price, well lower than the 7.5% it has averaged over the last eight quarters," Michael Khouw, chief investment officer at Optimize Advisors, said Wednesday on CNBC's "Fast Money."

That average post-earnings move has certainly been skewed by how disastrous last quarter's results proved to be for the stock, but a move of 5.6% higher by the end of the week would get Intel's stock back to within striking distance of where it dropped from, following that report. However, many options traders are betting that the stock will not land on the bullish side of that implied move.

"The most active options were the December 57.5-calls, over 13,000 of those traded [on Wednesday]," said Khouw, "But as we indicated, some of those were actually sales. That included a sale of 3,000 [of those calls] at $1.24, and I think those were being used in part to finance the purchase of puts of the same expiration."

A trade that combines selling calls and buying puts — or put spreads — represents a very bearish view of the stock between now and December, and could be a sign that a serious drop is in Intel's future.

"Sellers of calls and buyers of put spreads are probably hedging substantial stock positions, so they're capping the upside at less than 10% and want to see some near-side protection going into earnings," Khouw said.

Intel was slightly higher in Thursday's session.