Intel Options Traders Prep For Bigger-than-average Move Post Earnings

By Markets MarketWatch Pulse

Options traders are preparing for a relatively big move in Intel Corp.'s stock , after the chip maker reports fourth-quarter results after Thursday's closing bell. An options strategy known as a "straddle," which involves the simultaneous buying of bullish and bearish options with strike prices at current levels, is implying a 4.4% move in either direction on Friday following the results, according to FactSet. That means those who buy the at-the-money straddle, which is purely a volatility play, doesn't start making money unless the stock moves more than 4.4% in either direction Friday. That compares with the post-earnings one-day move of 2.9% on average--the median is 2.55%--over the past 22 quarters. The stock was up 2.4% in late-afternoon trade. It has slipped 0.3% over the past three months, while the Dow Jones Industrial Average has lost 3.1%.

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