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Intel Corp (INTC) stock has been in a huge uptrend for the last two months and could be due for a pause here.
Intel is a legacy semiconductor company undergoing a large‑scale turnaround as it works to regain process leadership and rebuild competitiveness across PCs, data centers, and its foundry business.
The company is pushing ahead with its advanced 18A manufacturing node and next‑gen Panther Lake and Nova Lake platforms, which are central to its comeback strategy.
Recent developments include continued expansion of Intel Foundry Services and efforts to secure major external customers as it positions itself as a global alternative to TSMC.
Today, we’re looking at a calendar spread on Intel Corp stock.
Calendar spreads are an option trade that involves selling a short-term option and buying a longer-term option with the same strike.
Traders can use calls or puts and they can be set up to be neutral, bullish or bearish with neutral being the most common.
When doing bullish calendar spreads, we typically use calls to minimize the assignment risk. Likewise, if the calendar is set up with a bearish bias, we use puts.
Neutral calendars can use calls or puts, but calls are more common.
Let’s look at an example using Intel Corp.
Intel Corp Calendar Spread Example
With Intel Corp stock trading around $125, setting up a calendar spread at $125 gives the trade a neutral outlook.
Selling the June 18 call option with a strike price of $125 will generate around $1,735 in premium, and buying the July 17, $125 call will cost approximately $2,170.
That results in a net cost for the trade of $435 per spread, and that is the most the trade can lose.
The estimated maximum profit is $850, but that could vary depending on changes in implied volatility.
The idea with the trade is that if INTC stock remains around $125 for the next few weeks, the sold option will decay faster than the bought option allowing the trade to be closed for a profit.
The breakeven prices for the trade are estimated at around $105 and $155 but these can also change slightly depending on changes in implied volatility.
In terms of trade management if INTC broke through either $105 or $155, I would look to adjust or close the trade.
Below is the payoff graph with the blue line representing the profit or loss at expiration and the purple line being the trade as of today.
Intel Company Details
The Barchart Technical Opinion rating is a 100% Buy and ranks in the Top 1% of all short term signal directions.
Long term indicators fully support a continuation of the trend.
Relative Strength is above 80%. The market is in extreme overbought territory. Beware of a trend reversal.
Intel Corporation, one of the world's largest semiconductor company and primary supplier of microprocessors and chipsets, is gradually moving into data-centric businesses such as AI and autonomous driving.
Intel is a dominant player for microprocessors in both consumer and enterprise markets.
Data Center Group, Internet of Things Group, Mobileye, Non-Volatile memory solutions group and Programmable solutions Group and All Other business units form the crux of Intel's data-centric business model.
DCG segment deals with servers, workstations and other products for cloud, enterprise, and communication infrastructure market.
IOTG offers high-performance compute solutions and embedded applications. PSG segment offers programmable semiconductors, primarily FPGAs and structured ASICs.
Mobileye is engaged in developing computer vision and machine learning-based sensing, data analysis, localization, mapping, and driving policy technology for ADAS and autonomous driving.
Mitigating Risk
Thankfully, calendar spreads are risk defined trades, so they have some build in risk management. Position sizing is crucial to ensure that minimal damage is done if the trade suffers a full loss.
One way to set a stop loss for a calendar spread is close the trade if the loss is 20-30% of the premium paid.
Please remember that options are risky, and investors can lose 100% of their investment. This article is for education purposes only and not a trade recommendation. Remember to always do your own due diligence and consult your financial advisor before making any investment decisions.
