U.S. OPTIONS/Intel put spread bets on stock drop
Reuters Story - May 29, 1998 17:19
%DRV %STX %US %.N/OPT INTC %MRG V%REUTER P%RTR
CHICAGO, May 29 (Reuters) - Institutional funds were seen
buying a big put spread in Intel Corp. options on
Friday morning, reflecting expectations that the stock, down to
its lowest level in seven weeks, will continue to fall, traders
said.
At 1134 CDT/1634 GMT, Intel stock was trading at 72-1/16,
down 1-7/16 on the day and down about 15 percent in the past
two weeks.
Traders said 4,000 June 65-70 put spreads were bought by
funds. That trade contributed to volume, with put volume
exceeding call volume 17,600 to 6,900.
Implied volatility for June 70 options rose to around 41
percent, up from an average of about 34 percent, amid concerns
about the outcome of a looming lawsuit by the U.S. Federal
Trade Commission.
"We don't know details about this suit. There's only
speculation and that's causing a lot of anxiety," said one
options analyst.
Another trader said there was still talk that Intel, the
world's biggest computer chip maker, would issue a profit
warning early next week.
The company is scheduled to release its second quarter
results on July 14.
Last quarter, Intel warned investors that it would not meet
Wall Street's forecasts.
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