Market Insights

Intel has been running since the end of summer, and some options traders could be looking for more upside.

This large transaction occurred yesterday morning in the semiconductor company:

• 33,800 March 55 calls were sold for $3.20.
• 33,800 March 60 calls were purchased for $2.26.
• Volume was below open interest in the March 55 calls but not the 60s. That suggests an existing position was closed and rolled to the higher strike.

Calls fix the price where investors can buy a security. That can gain value when shares rise but also expire worthless if the stock closes below a certain level.

In the case of Wednesday’s transaction, the trader apparently entered the session with a profitable position in the 55 calls. He or she sold those contracts and rolled to the 60s. Making the adjustment netted a credit of $0.94, recovering some of their capital. It also keeps them exposed to further upside.

Intel (INTC), daily chart, with select patterns and indicators.

INTC rose 3 percent to $48.72 yesterday and is up 147 percent in the last year. Most of the move came after the company announced a partnership with Nvidia (NVDA) on September 18. It’s also benefited from stronger PC sales and the launch of its 18A manufacturing process. The new method suggests INTC is regaining credibility after years of missteps, especially by delivering chips at the leading-edge nanometer scale.

The company reports earnings after the closing bell on January 22.

Overall option volume was slightly above average yesterday, according to TradeStation data. Calls outnumbered puts by a bullish 2-to-1 ratio.

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