Intel Pullback Brings Out Call-Buyers

By Pete Najarian, co-founder of OptionMonster.

NEW YORK -- Intel ( INTC) has been performing well for months, and option traders are betting that the chip maker's gains will continue.

Buyers acquired the June 28 calls Wednesday for 77 cents on Wednesday, locking in the price they need to pay for shares in the semiconductor giant. More than 6,000 contracts traded against previous open interest of just 1,483 at the strike, according to OptionMonster's real-time tracking systems.

Most of the activity took place as the market turned lower Wednesday, so traders were looking to take advantage of the pullback. The calls could generate major leverage if Intel pushes higher in coming months, but they could also expire worthless if it fail to rally or drops.

The stock ended the session down 1.32% at $26.88. It has run higher since trading under $20 back in September, and Wednesday's call-buyers are looking for shares to reach levels not seen since late 2007.

Najarian owns INTC shares.
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