Option traders are pricing in a near 4 percent move in Intel shares after its earnings report, based on contracts expiring Friday.

Intel Corp , the world's largest chipmaker, is slated to report second-quarter earnings after the market close on Wednesday.

The stock is in an interesting spot. It was once regarded as a technology bellwether, but its shares have traded in a range for several years. The stock is up more than 9 percent so far in 2011.

A quarter ago, Intel handily beat earnings expectations and said it expected 2011 worldwide PC sales to grow in the low double digits, well above consensus, saying independent forecasters were missing millions of PCs now being built by small manufacturers in China and other emerging markets.

But many investors remain skeptical and believe Intel will be forced to reduce its PC growth outlook by around half, either with the release of its second-quarter results or later this year.

Sentiment is not clear cut, judging by the near-term activity in Intel options heading into earnings. Speculators have been betting on upside while others are seeking protection if Intel falls short of expectations.

It looks like option traders are expecting a less than 4 percent move on the stock based on earnings data, said TD Ameritrade chief derivatives strategist J.J. Kinahan.

Trading has been very heavy in the weekly July $23 calls and July $22 puts. Both contracts go off the board on Friday.

Although a less than 4 percent move is indicated, there are many speculators playing this stock for an upside move after earnings, Kinahan said. On the put side in real dollar terms, it is a cheap hedge versus long stock in case of an earnings miss.

Pre-earnings flow in Intel is running 2.5 times typical levels with about 129,000 calls and 87,000 puts traded by early afternoon on Wednesday, according to options analytics firm Trade Alert.

The largest block of the day was an opening customer buyer of $23 strike calls expiring Friday, for 50 cents when shares were near $23.14, suggesting a possible move upward after results come out, said Trade Alert President Henry Schwartz.

The July weekly $23 puts calls are the most active, carrying volume of 35,756 contracts, followed by the July $23 weekly calls with volume of 23,595 contracts. Both options have exceeded their open interest, indicating new positions were put on, Trade Alert data shows.

We can get a feel for what the market is expecting for Intel earnings by observing the premium in the weekly options, said Steve Place, a co-founder of options analytics firm InvestingWithOptions in Mobile, Alabama. On Wednesday afternoon, the July $23 straddle offered at 90 cents, was pricing in nearly a 4 percent move into earnings, he said.

The stock usually moves 3.28 percent on the day after earnings, judging by the last four quarters, according to Bespoke Investment Group of Harrison, New York.

Traders often look at option prices on the straddle to estimate the option market's view of the potential range of a stock going into an event like earnings. A long straddle involves buying a put and a call with the same strike price and maturity date and is a bet on volatility.

Intel's revenue in the current quarter is seen increasing about 5 percent over the second quarter, according to Thomson Reuters I/B/E/S -- less than normal growth of around 8 percent for this time of year.

(Reporting by Doris Frankel; Additional reporting by Noel Randewich in San Francisco; Editing by Leslie Adler)

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