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Intel Corporation Message Board

  • yourwishismine yourwishismine Dec 26, 2012 9:54 PM Flag

    Over 14,000 $22.50 call contracts traded today... speak well for upward motion...

    Looking good...

    Sentiment: Strong Buy

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    • it takes a buyer and a seller to make a market.

    • Harder to tell ....

      For each option transaction, there is a buyer and a seller. Someone today initiatied EITHER a "BUY " or a "SELL" trade of 14,000 contracts in order to generate these new contracts. The BUY/SELL order could be to OPEN new contracts or to CLOSE existing contracts.

      The 14,000 contracts is below the open interest so the trade could be to close as well as open.

      What does it mean if the order was a:

      BUY TO OPEN? An out of the money new buy would be bullish. Someone expects Intel to finish above the $22.50 strike.

      BUY TO CLOSE? Closing an existing position that they had earlier SOLD TO OPEN, would tend to be bullish since it looks like they think the Intel share price drop is over.

      SELL TO OPEN? Is BEARISH since it appears that they expect to sell contracts that will not be exercised and therefore Intel to end trading in Jan below $22.50.

      SELL TO CLOSE? Is BEARISH since someone who owned the call options is getting out because they expect the options never have more value.

      There was also 8,000 $21 contracts traded. It could be someone who sold the 8,000 $21 contracts at 40 cents and then bought 14,000 $22.50 at 7 cents for a credit. This would be a volatility trade where they would make a credit on the trade which would stay profitable if Intel finished below $22.50 or above say $24 (the profit on the long 14,000 was more than the short of the 8,000).

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