IB Options Brief: Intel Corp. (INTC) & Domino's Pizza, Inc. (DPZ)

Posted May 1st, 2012 by Caitlin Duffy in Unusual Activity

INTC ñ Intel Corp.
Bullish positions are building in the weekly options on Intel Corp., with shares in the chip giant up better than 2.0% at $29.02 in the first half of the session, helping to lift the Dow Jones Industrial Average to the highest in four years. Intelís shares traded up to their highest level since 2004 today and it looks like some strategists are positioning for the stock to extend gains this week.

Volume in the weekly calls is heaviest at the May 04 í12 $29 strike, where more than 6,500 contracts are in play versus open interest of 1,824 positions. It looks like most of the calls were purchased this morning for an average premium of $0.09 apiece. Intraday price action has lifted premium on these contracts, which currently tout a price tag of $0.15 apiece, as of 12:05 p.m. ET.

DPZ ñ Dominoís Pizza, Inc.
Shares in the second-largest U.S. pizza chain are not participating in the market rally today, with shares trading down more than 14.0% this morning to an intraday low of $32.40, after the Company posted lower-than-expected first-quarter revenue and earnings. Options traders populating Dominoís Pizza today appear to be initiating both bullish and bearish positions in the front month.

One strategist looking for shares to extend losses in the near term snapped up around 700 puts at the May $35 strike this morning at a premium of $1.10 apiece. The put buyer stands ready to profit at expiration in a few weeks should DPZ shares decline 1.7% from the current price of $34.50 to breach the effective breakeven point on the downside at $33.90.

Meanwhile, a block of 1,000 puts in play at the lower May $34 strike were likely sold for a premium of $0.80 each. The put seller may keep the full amount of premium received on the position if the pizza providerís shares settle above $34.00 at May expiration.

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