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Intel Corporation Message Board

  • galba_imperator galba_imperator Feb 4, 2013 1:27 PM Flag

    INTC holding up in market retreat

    Maybe it's imminent x-div day, and/or maybe it's just a darn great investment.

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    • Alex,
      regarding the May 25 stradele ,the 5000 contracts that is (you mentioned in a different post). When you get a chance check what are the break even points, the low and the high? ( i wanna make sure i calculate it correctly ). Isn't it a bulish stance since the selected a higher strike price then current? in any case it seem a massive gamble that the pps will move either above or below the the break even points to be profitable. imo.

      • 2 Replies to mystk7
      • Alex,
        in a different post you explained (can't seem to find the post but just the same ) the arbitraze with the ex-dividend play that some use in order to shave some pennis.
        imo, it's bad for the markets that some do that instead of having a solid strategy play, like playing volitilty, but it is what it is.

        Also was mentioned that if for example , there is a huge puts buying the OMM will have to hedge by shorting (500,000 shares against 5000 puts) Intel. What's not clear to me is how is it hedge since the OMM will have to pay the divinded ? unless we asume that he is doing naked short behind the scene..

        hope my Q. make sense

        tnkx

      • Arbitraging can take many forms.

        Taken alone, it is a bearish bet. Assuming that we just consider JUST the 5,000 May $25 put and calls contract as:
        someone bought the calls
        they also bought the puts

        That is a bet on volatility. They are betting that INTC goes farther away from the $25 strike than they paid for the $4.xx they paid. The $25 strke would seem to be bearish. INTC would have to reach $29.xx for them to break even. As the calls gain value, the puts lose value.

        IMO, the option trading was NEUTRAL and only concerned with shaving a penny or two in guaranteed profits. They are playing arbigrage games across the exdividend.

        One example (vertical ITM calls) would be for them to BUY a DEEP call at zero premium and sell a shallower call. They exercise their calls, grab the dividend and let the shallower call be exercised. If someone else exercises there call and takes the shares, they just pass the shares they just exercised on through.

        One more example (wide ITM strangle) where they buy a deep call and a deep put. The premium and costs have to be less than the dividend. The MAY $25 puts looked like they had between 10/20 cents bid/ask premium on them when I looked at them. You buy the deep call at zero premium and the MAY $25 puts, exercise the calls, get the dividend and then exercise the puts when you want.

    • They are buying the deep calls to execise early before ex-div. The option activity dampens the trading range.

      8.8k Jan 2015 $15 strike
      1.6k Jan 2015 $13 strike
      38k Jan 2014 $15
      2k Jan 2014 $13
      3k Jan 2014 $10
      26k Feb $20

 
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