Schaeffer's Trading Floor Blog

Options Check-Up: Advanced Micro Devices, Inc., Amazon.com, Inc., and Herbalife Ltd.

Analyzing recent option activity on AMD, AMZN, and HLF

by 8/15/2014 7:42 AM
Stocks quoted in this article:

Among stocks attracting attention from options traders lately are semiconductor concern Advanced Micro Devices, Inc. (NYSE:AMD), online retail giant Amazon.com, Inc. (NASDAQ:AMZN), and nutritional supplements provider Herbalife Ltd. (NYSE:HLF). Below, we'll break down how option buyers are positioning themselves, and how much speculators are willing to pay for their bets on AMD, AMZN, and HLF.

  • AMD bucked the broad-market trend higher on Thursday, settling fractionally lower at $4.08. The stock has spent most of the past year dawdling between $3.25 and $4.50, and Wall Street appears skeptical of an upside breakout anytime soon. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio of 1.12 stands just 6 percentage points from a 52-week peak, implying that option buyers have picked up Advanced Micro Devices, Inc. puts over calls at a near-annual-high clip during the past two weeks. However, AMD's short-term options can be had at a relative bargain, as the stock's Schaeffer's Volatility Index (SVI) of 46% sits in the bottom-third of its annual range.

  • AMZN traders continued to cheer the company's foray into the mobile payments world, with the shares ending 2.1% higher at $333.21 on Thursday. The stock is on pace to end the week 5.2% higher, and could extend its upward momentum if option bears decide to abandon ship. The stock's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.28 registers in the 96th percentile of its annual range, pointing to a healthier-than-usual appetite for long puts over calls of late. Now is an opportune time to purchase AMZN's short-term options, as the equity's SVI of 24% sits just 9 percentage points from a 12-month low. In addition, Amazon.com, Inc.'s Schaeffer's Volatility Scorecard (SVS) of 97 indicates that AMZN has tended to make outsized moves on the charts, relative to what the options market has priced in.

  • Option traders have also been eyeing more downside for HLF, which added 0.4% to settle at $52.35 on Thursday. Option buyers have scooped up more than two Herbalife Ltd. puts for every call during the past couple of weeks, as evidenced by the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 2.43 -- in the 87th percentile of its annual range. However, HLF -- which has shed one-third of its value in 2014 -- boasts an SVS of 29, suggesting the security's short-term options players have priced in bigger-than-realized moves during the past year.

permanent link
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.