$INTC sends valentine to bulls

Option traders have tripled their money from a large upside position opened in Intel on Valentine’s Day.

On Feb. 14, Investitute’s tracking systems showed that 30,000 Weekly $51 calls expiring on March 1 were purchased for $0.66 as part of a bullish roll with shares at $50.44. This was clearly a new position, as open interest in the strike was only 1,500 contracts before the trade occurred. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded for as much as $2.11 today, more than 3 times their purchase price. The stock rose less than 5% in the same time frame, underscoring how options can far outperform moves in their underlying shares.

It is the second winning trade in Intel posted on Investitute this month.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

INTC was up 2.1% to $52.49 today. Morgan Stanley upgraded the chip maker to “overweight” from “equal weight” and raised its price target to $64 from $55 this morning.