🕒 Market Overview: SoftBank's $2 billion Intel investment sparks 6% premarket surge and options volume explosion.

🔄 Sector Insight: Semiconductor positioning shifts bullish as geopolitical chess intensifies between U.S. and China.

💰 Today's Trade Idea: Long-term bull call spread on INTC capitalizes on contrarian recovery potential.

SMART TRADE IDEA

Bull Call Spread on INTC

Trade Setup:  Buy $28 Call / Sell $38 Call, March 20, 2026 expiration

• Cost: $2.00 ($200 per spread)

• Max Profit:  $8.00 ($800 per spread)

• Breakeven:   $30.00 per share on March 20, 2026.

Management Plan:  Exit at 50% loss, roll up, or take profits if INTC’s share price reaches $35.

A bullish position on INTC is a contrarian trade in the current environment. However, SoftBank’s $2 billion investment in the company assumes the investment has undergone significant due diligence and is a value-based decision. 

NOTE: Remember, options trading involves substantial risk and is not suitable for all investors. Consider your investment objectives, financial resources, and experience level before implementing this or any options strategy.

DISCLOSURE: Trade recommendations may have changed since publication. Evaluate current market prices and risk/reward before acting. Trading involves significant risk and is not suitable for everyone. This is not personalized investment advice. Past performance doesn't guarantee future results. Publisher and contributors may hold positions in recommended securities. Readers assume full responsibility for their trading decisions. Consult a financial professional before investing.

MARKET BREAKDOWN

Macro Lens – Big Picture Market Forces

The semiconductor landscape faces a dramatic shift as geopolitical tensions reshape global supply chains. SoftBank's strategic investment in Intel signals recognition that semiconductor independence has evolved into a national security imperative. With the U.S. government potentially considering its own stake in Intel, traders are witnessing the potential birth of a quasi-nationalized American chip giant.

Federal policy continues driving domestic manufacturing initiatives while U.S.-China tech tensions escalate. China's retaliation through critical mineral export restrictions on gallium and germanium adds complexity to chip manufacturing supply chains. These macro forces create sustained volatility across semiconductor names as markets price in technological Cold War dynamics.

Sector and Stock Watch – Identifying Key Movers

Intel experienced explosive options activity with over 1.01 million contracts trading on August 18th – representing 118.77% above the 30-day average. The bullish sentiment shift becomes evident as nearly 72% of options trades were calls, marking a complete reversal from recent bearish positioning.

The volatility smile across semiconductor options has become more pronounced, with traders hedging against potential geopolitical disruptions. September $26.50 puts saw significant activity with 2,200 contracts representing $422,400 in premium, while weekly $25 calls surged as momentum built.

Trading Strategy in Focus – How to Play the Market

The current environment favors longer-term positioning rather than short-term speculation. Intel's technical chart shows a 74.5% decline from the January 2020 high of $69.29 to the April 2025 low of $17.67, creating a compelling contrarian setup for patient traders.

Technical resistance sits at the February 2025 high of $27.55, with a break above this level potentially signaling the end of the bearish trend. The combination of SoftBank's validation and potential government involvement creates a unique risk-reward scenario for structured options strategies.

Despite the price action in Intel (INTC) shares, the company remains a dominant force in the semiconductor business. At over $25 per share, INTC’s market capitalization exceeds $100 billion, and it is a highly liquid stock, trading an average of over 130 million shares daily.

The ten-year chart highlights the 74.5% decline from the January 2020 high of $69.29 to the most recent April 2025 low of $17.67. The critical factors that have led to SoftBank’s value-based $2 billion investment are the reduction in workforce and expenses, as well as the company’s refocusing on the strategic importance of the U.S. semiconductor sector to technological independence. The long-term chart highlights that technical support is at the April 2025 tariff-inspired low of $17.67, with technical resistance at the February 2025 high of $27.55 per share. A break above this level would signal the end of the technical bearish trend, with the next upside target at the July 2024 high of $30 and the December 2023 peak of $51.28 per share.

SoftBank is betting that INTC’s strategic position will eventually cause the shares to recover. The bottom line is that the SoftBank investment and any bullish position in INTC are a contrarian approach, given the bearish trend that remains firmly intact.

Given the trend and issues facing INTC, a longer-term approach with a vertical bullish call spread is likely optimal for those who believe the shares will recover. The March 20, 2026, $28-$38 bull call spread at $2 or lower has a risk-reward ratio of at least 1:4.

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