I put on an Intel (INTC) trade Wednesday that perfectly captures how I think about earnings plays when a stock has already made a massive move.
Intel has been nothing short of remarkable lately. This is a company that was on the brink of going out of business, years behind Nvidia in the chip race, yet it surged 250% over the past year.
A big part of that rally came from the government taking a stake in the company, which completely changed the narrative.
But here’s the thing about big moves like this — they often create interesting opportunities around earnings, especially when the market’s already pricing in most of the excitement.
The Setup That Caught My Attention
Intel reports earnings after the close today. When I looked at the numbers, something stood out immediately. The stock’s average earnings move is about 11.5%, but the current implied move is pricing in about 10%. That’s a $6 to $7 range on a $66 stock.
Given that Intel has already ripped 250%, I’m not convinced we’re going to see another explosive reaction. That’s where the calendar spread structure makes sense. Calendar spreads tend to be cost effective compared to other earnings strategies because you’re selling the faster decaying option and buying more time value.
They work well when you expect the stock to stay within a defined range, and they let you express a directional or neutral thesis with limited capital at risk.
I constructed this trade by selling the April 24 expiration, $67 strike call, and buying the May 1 $67 call for $0.82 debit. My maximum risk is capped at $82, and the break-even analysis shows profitability between $60 and $74 per share post-earnings. That gives me coverage for about a $7 move down (10.5%), and an $8 move up (12%).
Why This Structure Works Right Now
The beauty of using the April 24 and May 1 expirations is the instant feedback. Earnings hit Thursday after the close, so Friday’s trading will immediately show whether this strategy pays off.
That short runway also introduces some timing risk. Since the long leg extends only to the following Friday, I’m relying on the stock to stay near the strike shortly after earnings. If the market reacts slowly or drifts too far before next week, the setup becomes less favorable.
Timing is a critical part of this trade — it’s tight but intentional.
There are a couple of realistic scenarios to consider. If we get a quiet earnings reaction and the stock consolidates near my strike, this could be very profitable — potentially 200% returns from my entry.
A muted move is ideal because the near-term option decays quickly while the next week option keeps more of its value. On the other hand, a volatile post-earnings reaction would pressure the spread. A sharp breakout or breakdown stretches the position outside the profitable zone fast, and that’s the main risk I’m accepting here.
All of this reinforces why I like calendar spreads for earnings when a stock has already made a huge run. They offer defined risk, measured exposure and multiple ways to win if the stock behaves reasonably and doesn’t crater or blast off again.
And in Intel’s case, after a 250% move and a major shift in its long-term narrative, a period of consolidation feels more realistic than another oversized spike.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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