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Will INTC Earnings End the Chip Rally, or Send it to the Moon?

by | Jan 25, 2024

Another day, another avalanche of unusual options activity hitting the News Flow Scanner!

The action picked up Thursday right where we left off the day before, with the very first order hitting immediately after the opening bell in… you guessed it a chip stock: Advanced Micro Devices (AMD). 

In fact, four of the first seven orders were in AMD, and seven of the first 11 were in AMD or Nvidia (NVDA).

During the first 30 minutes of trading, 21 orders hit the News Flow Scanner… Of those 21 orders, 14 were in the same semiconductor chip stocks that we discussed in Wednesday’s newsletter. 

While there’s no doubt this is by far the hottest sector for trading right now, we’re also in the thick of earnings season!

And guess who’s reporting after the close today? If you guessed a chip stock, you nailed it: Intel (INTC)!

As of 1 p.m. ET Thursday with INTC trading right around $49.50 a share, we had two orders to consider, both in the February monthly expiration: a $49.50 put, and a $53 call. 

Now, puts are often downside protection against a long stock position in case it tanks, but these are in the money, making them a little more attractive than normal. 

Market makers expect about a $3.67 move up or down in the stock up or down in this expiration, which puts that $53 call just barely in line. 

If you choose to enter either, just know they could drop a ton tomorrow — though, not quite as much as the weekly option, which would likely go to $0 if wrong. 

The big question is whether or not poor INTC — which is up about 45% the past three months — earnings could be a wet blanket for this white-hot sector. 

Seems unlikely but it’s something to watch. 

We also saw an earnings bet in Western Digital and a T-Mobile order from late Wednesday. Both also report after the close today. 

Thursday’s Top Order Flow: 

  • INTC Feb24 Strike: 49.5 Puts premium: $191,673 ASK BEARISH Trade Date: January 25, 2024 Trade Time: 10:22 am
  • INTC Feb24 Strike: 53 Calls premium: $115,000 ASK BULLISH Trade Date: January 25, 2024 Trade Time: 9:57 am
  • WDC Feb24 9th Strike: 59 Calls premium: $115,320 ASK BULLISH Trade Date: January 25, 2024 Trade Time: 12:05 pm
  • TMUS Feb24 Strike: 162.5 Calls premium: $117,000 ASK BULLISH Trade Date: January 24, 2024 Trade Time: 3:06 pm

Note: If no date is listed after the month, it’s the monthly expiration (third Friday). 

Lance Ippolito Trading Team

Lance doesn’t want the CCP spying on him, so you’ll never find him on TikTok. Same goes for other social media sites, which are filled with impersonators, scammers and crypto bros. 

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And in his private Telegram channel: https://t.me/+-gVwEIwGJhplMTgx 

*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk. 

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WRITTEN BY<br>Lance Ippolito

Lance Ippolito

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