Great Entry Point for Intel
One of the great things about the holidays is the sales. Bargains, bargains everywhere you look. Bargains happen in the options market too in terms of the price you can pay for premium. This time before New Year's Eve gives savvy traders a chance to pick up on some cheap volatilities.
Since earnings season starts in two weeks, I thought it would be best to organize Aqumin's AlphaVision Landscape into earnings blocks. Each block is the expected earnings date in sequential order, so the names line up like little soldiers. With next cycle expiration on January 21, I am looking for cheaper option premium with an eye toward unloading it prior to earnings. Red buildings have current 30-day implied volatility trading within 20% of the year lows as of Tuesday morning. I have Origin Agritech ( (SEED) - Get Report, at 4% over lows) and Intel ( (INTC) - Get Report, 10% over lows) highlighted as two of the three names with relatively cheap volatility going into the latter's January 13 earnings date. SEED had a big move yesterday (thus the big spike up) with a potential change in the way China buys genetically modified seeds. There is some interesting pricing but very wide markets, so I will just add that to the watch list. The offers on options have jumped to the low 60s in SEED so the name will drop off of my cheapy list this morning. Fun to watch, but not much to do (at least for me).
Earnings Blocks
Source: Aqumin
(If you want to learn more about 3D visualization of financial data visit
www.aqumin.com/thestreet
)
INTC is still cheap. The market has decided that name is not going to move again, or at least pricing it that way. 30-day realized volatility is setting lows for the year and this looks like a great entry point. Like the other cheap technology companies, this "fall money" has a way of finding them. The INTC January 20s look like the perfect levered long delta play. Hold to earnings on January 13.
Trade: Buy to open 3 INTC January 20 calls for $1.10 on a 76 delta with INTC trading $20.88, or better.
At the time of publication, Andrew Giovinazzi held no positions in the stocks or issues mentioned.
Andrew is the Executive Vice President of Business Development for Aqumin, where he participated in the design team to apply AlphaVision to the financial markets. For 15 years he was a member of the Pacific Exchange and the Chicago Board Options Exchange, where he actively made markets and traded in both equity and index options. At the same time Andrew started and ran the Designated Primary Market Marker post for Group One, Ltd. on the floor of the CBOE where it became one of the highest grossing posts for the company in 1992 and 1993. While in Chicago and San Francisco, Andrew was instrumental in creating and managing a training program that allowed Group One, Ltd. to dramatically increase its trader count over an eight year period. He left Group One, Ltd. to co-found Henry Capital Management in 2001.
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