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
IntelCEO Bob Swan is stepping down — just weeks after his two year anniversary of serving in this position. Yikes. He will be replaced on Feb. 15 by industry expert and VMware CEO Pat Gelsinger.
During Swan’s leadership, Intel’s performance has been less than stellar…
Last year, Intel (Nasdaq: INTC) experienced its sharpest post-earnings stock decline in 20 years, thanks in part to delayed manufacturing for next-generation computer chips, Apple announcing it will no longer use Intel’s chips after 15 years and general loss of market share to rivals.
The loss of manufacturing leadership hadn’t gone 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 Future of Wealth Head Trader Lance IppolitoWeekly Blitz Alert members, as noted in the daily Blitz Market Color section (for members only), he pointed out that Intel calls for next week, Jan. 29 expiration calls, and February calls were bought in size.
It’s a good thing we were all over this options move a day before news of the Intel CEO stepping down because, for the traders that followed the money from our Blitz Market Color section, 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!