INTC is partying like it is 1999

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More Yellen testimony hurt the RUT and VIX today as both those indexes made some pretty good size drops.  With a lot of old tech like MSFT and especially INTC, starting to trade at multiples out of the single digits what is volatility to do.  A client wrote me today and asked if  CSCO is next?  All of a sudden establish companies are doing something not many thought possible a year ago and that is deliver some growth.

A stock like INTC is in uncharted territory right now.  It is now trading at levels higher than in 2007 and it looks poised to grow.  Not very long ago we highlighted the old tech names, Old tech is new again. and not much has changed on that score for me.  Old tech is behind the infrastructure of all the new mobile devices and is probably going to keep right on growing.  If an old line semi-conductor company can grow, look out.  A name like INTC can add a few points to a value multiple now that the cat is out of the bag. 

The Trade

I think now is the time to roll up for more deltas in the old techs like a MSFT or INTC.  Sell out the deep calls you might be long and grab more deltas by buying just ITM calls in this super cheap IV environment.  Sell some nearer term OTM calls on a lift to simulate the dividend.  Go 6 months out the long delta.

Disclosure: positions in INTC

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