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Intel Bulls Look for More Gains

By Pete Najarian, co-founder of OptionMonster

NEW YORK -- Intel (INTC) has been holding near its 200-day moving average, and on Monday the chipmaker saw steady and impressive upside option action.

The November 24 calls lit up early, trading in size for 44 cents and followed by a large chunk that went for 62 cents. About 19,500 contracts traded in volume well above the strike's previous open interest of 3,938, showing that new money was put to work.

These calls lock in the price where the semiconductor stock can be bought, letting investors cheaply position for a rally. They can also generate some nice leverage from even a small movement in the underlying share price.

Intel rose 1.06% to $22.91 on Monday, challenging its 50-day moving average. Monday's calls, which lock in the price where traders can buy the stock, are looking the shares to test their peaks from mid-June.

Total option volume in the name was twice its daily average. Some 84,000 calls overall vs. fewer than 33,000 puts, so activity was definitely skewed toward the bulls.

Najarian owns INTC calls

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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