Hey trader,
Institutions spent the morning buying downside in Intel as the stock drifted off its highs.
The mechanism is open-interest accumulation. The buyers are stacking puts faster than the existing book can absorb.
The Block Hunter Console flagged the prints by size, showed them filling at the ask, and confirmed volume running past open interest. That marks fresh positioning, not closing trades.
The bias question does not matter here. The dealer who sold those puts has to hedge, and that hedging is what moves price.
There is a shelf at 110 with almost nothing under it.
Here’s how I see it playing out.
What The Console Flagged On Intel
Intel showed bearish interest building from the open. The puts were getting bought on every pop in the stock.
The Console pulled two prints at the 80 strike for September 18 expiration. One was 7,000 contracts. The next was 1,700.
That is 8,700 contracts bought against open interest of 8,300 at the strike. Volume past open interest tells me these are opening positions.
The contracts carry about a 15 delta. They sit deep out of the money, which means the buyer is reaching for a real move down.
Why The Side Of The Print Matters
A print only matters once you know who hit it. The Console marks the ask as a buyer and the bid as a seller.
The Intel put side traded about double at the ask against the bid today. That is a clean buy bias on puts across the chain.
The buying was not isolated to one strike. The 100 puts for June 5 ran 10,000 contracts. The 65 strike picked up size as well.
It does not matter whether any single line is a hedge. The dealer effect is the same once the puts are on the books.
The 110 Shelf And The Air Below It
Here is where my read takes over from the print log. I map the open interest into a gamma structure. Intel sits in negative gamma below 120.
The 110 level is the shelf. It has held the stock up.
Below 110 there is very little to lean on. The book is balanced at 105 and again at 100. Neither level builds real support.
Lose 110 and the next real pickup in negative gamma does not arrive until 90. That is a long way down with thin footing in between.
How The Dealer Has To Hedge
The buyer of those puts is long downside. The dealer on the other side is short the puts.
Short puts leave the dealer short gamma beneath the strike. To stay neutral as Intel falls, the dealer has to sell stock into the decline.
That selling is the accelerant. The further the stock drops through 110, the more the dealer sells. The move feeds itself toward 90.
The wall sits overhead at 120, stretching toward 130. Positive gamma there caps the upside. Any bounce runs into sellers before it gets far.
The Trade
Treat this as a framework. The structure is a bearish put vertical positioned under the 110 shelf.
The straight 110/105 vertical priced around $2.63 for a $5 width. That works. It does not excite given the cost against the skew.
The skew sits mildly against the buyer here. It flattens out further out of the money, which is where the better expression lives.
- Setup: Intel put accumulation, 8,700 contracts at the 80 strike for Sept 18, opening
- Read: negative gamma below 120, a 110 shelf, thin support down to 90
- Structure: bearish put vertical positioned below 110
- 110/105 vertical: about $2.63 for the $5 width
- Preferred: a further out-of-the-money vertical near a 30 delta, bought near $1, target roughly $1.70 [VERIFY: exact OTM strikes and spread width]
- Risk: cost of the spread per contract
- Invalidation: a break and hold above 120, which opens the upside instead
What The Tape Has Not Priced Yet
The chart shows Intel off its highs and nothing more. It gives no reason for the put buying that ran all morning.
The prints explain it. The Console named the size, the side, and the opening nature of the flow before the stock confirmed anything.
By the time 110 breaks on the chart, the contracts that decide the move have already been sitting on the books.
That is the gap between trading the flow and reacting to it.
Brandon Chapman, CMT
Creator of Ghost Prints
