The Anatomy of a Trade: Intel CEO Steps Down and Stock Soars
Have you ever wondered how options trading can benefit you — from a risk vs. reward point of view — when there’s a major news catalyst? Take a look at news of the Intel CEO stepping down, sending shares sharply higher Wednesday.
Intel CEO Steps Down and Stocks Soar
Intel Corp. (Nasdaq: INTC) CEO Bob Swan is stepping down and will be replaced on Feb. 15 by industry expert and current VMware CEO Pat Gelsinger — just weeks after his two-year anniversary of serving in this position. Yikes.
During Swan’s leadership, Intel’s performance has been less than stellar…
Manufacturing for next-generation computer chips was delayed… Apple announced it will no longer use Intel’s chips after 15 years… And loss of market share to rivals led to Intel experiencing its sharpest decline after earnings in 20 years in 2020.
The loss of manufacturing leadership did not go unnoticed: Third Point Partners, an SEC-registered investment adviser, suggested the board look for “strategic alternatives” about a month ago.
So Intel listened.
After news hit the stock market, Intel shares began to take off. The stock was up about 13% premarket and over $60 a share before settling back down around $57, up 8% by lunchtime on the East Coast.
And it looks like an insider options trader knew something was up days before the announcement… so we paid attention.
For our Weekly Blitz Alert members, as noted in the daily Blitz Market Color section (for members only), we pointed out that Intel calls for next week, Jan. 29 expiration calls, and February calls were bought in size.
Lance Ippolito’s Blitz traders were all over Intel call options a day before the news broke, and those calls did something incredible for our traders overnight.
In addition to weekly trade alerts, members can get all sorts of trade ideas each day from my market color commentary.
Watch the video below to see how much call options soared after news of Intel CEO stepping made headlines. Have you traded Intel stock before? What do you think about Bob Swan’s leadership? Are you intrigued by the stock now? We’d love to know your thoughts in the comment section below!