Chinese authorities’ persistent efforts to keep U.S. chipmakers out of the country had another negative impact on Intel and AMD on Friday. Former chip giant Intel continues to take the punches. But just as Mike Tyson looks to upset YouTuber Jake Paul this summer, Intel is coming off the mat and trying to regain relevance in chip manufacturing. This trade aims to take advantage of the current discount and increased volatility being applied to Intel. According to the Wall Street Journal, China has instructed its carriers to exclude foreign semiconductor manufacturers within three years. The report influenced the stock price of Intel (INTC) and other semiconductor stocks on Friday. Of all the major semiconductor companies, Intel has probably been the most disappointing in recent years. This disruption presents an opportunity for this disadvantaged chipmaker. INTC SOXX 5Y Mountain Intel, 5 Years Earlier this week, Intel announced its latest artificial intelligence chip called Gaudi 3. Intel is trying to invade and take market share from his Nvidia, the AI leader that holds almost 80% of the AI market share. chip market. Intel’s new chips are expected to sell for a fraction of the price of Nvidia’s flagship chips. I would like to sell the put spread to collect short term income and potentially own this still important US chipmaker. The trade sold his May 17 $36 put on INTC for $1.80. I bought INTC’s May 17 $33 puts for $0.65. The net credit for selling this put spread of $1.15 was to collect $150 per lot sold. The trade seeks to capitalize on the increased volatility caused by Intel’s near 4% drop in the stock market. While selling put spreads has historically been intended to generate an income stream for investors, there is also an element of traders’ willingness to own this important blue-chip stock name. Disclosure: (Long Term Information and This Transaction) The above is subject to our Terms of Use and Privacy Policy. This content is provided for informational purposes only and does not constitute financial, investment, tax, or legal advice or a recommendation to purchase any security or other financial asset. The content is general in nature and does not reflect your unique personal circumstances. The above may not be appropriate for your particular situation. Before making any financial decisions, you should strongly consider seeking the advice of your own financial or investment advisor. Click here for full disclaimer.
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