Chinese officials’ persistent effort to cut U.S. chipmakers out of the country are adversely impacting Intel and AMD yet again Friday. Former chip heavyweight Intel continues to take punches. However, just like Mike Tyson looking for a comeback against YouTuber Jake Paul this summer, Intel is looking to get off the mat and reclaim its chipmaking relevance. This trade seeks to take advantage of the current discount and the heightened volatility being applied to Intel. China has directed the country’s telecom carriers to cut out foreign chipmakers in three years, according to the Wall Street Journa l. The report hit shares of Intel (INTC) and other chip stocks on Friday. Of all major semiconductor companies, Intel has perhaps been the most disappointing in recent years. This dislocation provides opportunity for this out-of-favor chipmaker. INTC SOXX 5Y mountain Intel, 5 years Earlier this week, Intel unveiled its latest artificial intelligence chip, called Gaudi 3. Intel is trying to penetrate and take market share from AI leader Nvidia, which possesses nearly 80% of the market share in the AI chip market. Intel’s new chip is supposedly being priced at a fraction of the cost of Nvidia’s leading chips. I want to sell a put spread to short-term collect income and potentially own this still essential U.S. chipmaker. The Trade Sold the INTC May 17 $36 put for $1.80 Bought the INTC May 17 $33 put for $0.65 Net Credit for selling this put spread of $1.15, collecting $150 per one lot sold. This trade seeks to capitalize on the increase in volatility as Intel dropped nearly 4% on the open. Selling put spreads historically seeks to produce an income stream for investors, but there is also a component for the trader to be willing to own this essential blue-chip name. DISCLOSURES: (Long intel and this trade) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
