Semiconductor Bulls Turn to Intel

By David Russell of OptionMonster

NEW YORK -- Semiconductors have been strong recently, and Wednesday the bulls piled into industry leader Intel (INTC).

OptionMonster's tracking programs detected the purchase of more than 43,000 October 30 calls in the chip giant, most of which priced for 22 cents to 25 cents. Volume was more than 11 times the previous open interest at the strike, indicating that new money was put to work.

These long calls lock in the price where shares can be purchased, letting investors cheaply position for a move higher without necessarily buying the stock. That way they limit their risk but also are assured that won't miss a rally.

Intel shares rose 0.81% to $25.02 on Wednesday. The stock peaked above $27 in January, dropped on a disappointing quarterly report, and traded as low as $23.50 by early February. It spent more than a month in a tight range but has been ramping higher in the last week.

Total option volume in the name Wednesday was quadruple its daily average, with calls outnumbering puts by almost 9 to 1.

Other chip companies such as Qualcomm, Cypress Semiconductor, and Lam Research have also seen bullish activity in recent sessions.

Russell has no positions in INTC.

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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