Schaeffer's Trading Floor Blog

Options Check-Up: Advanced Micro Devices, Inc., Barnes & Noble, Inc., and Zynga Inc

Analyzing recent option activity for AMD, BKS, and ZNGA

by 6/24/2014 4:56 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are microchip maker Advanced Micro Devices, Inc. (NYSE:AMD), bookseller Barnes & Noble, Inc. (NYSE:BKS), and social gaming giant Zynga Inc (NASDAQ:ZNGA). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on AMD, BKS, and ZNGA.

  • AMD shed 1.8% today to close at $3.94, falling in sympathy with the broad-market indexes. This is more of the same for the shares, which are sitting slightly in the red on a year-over-year basis, and have lost 11.9% since this time last week. Not surprisingly, traders have been picking up Advanced Micro Devices, Inc. puts at an accelerated clip recently, relative to calls. Specifically, the stock's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.84 ranks just 7 percentage points from a 12-month peak. Meanwhile, short-term options are about as expensive as usual, with AMD's Schaeffer's Volatility Index (SVI) of 56% sitting in the 48th percentile of its annual range.

  • BKS finished the session down 0.5% at $20.56, with the company's fiscal fourth-quarter earnings report due out tomorrow morning. Ahead of the event, speculators have been betting bullishly, as the equity's 10-day ISE/CBOE/PHLX call/put volume ratio of 7.19 is higher than 89% of all other comparable readings from the past year. With 22.5% of the stock's float currently sold short, though, a portion of this activity could be at the hands of short sellers hedging against any earnings-induced upside. As with AMD, Barnes & Noble, Inc. options aren't particularly cheap or expensive right now. The stock's SVI of 49% checks in higher than 44% of the readings taken in the last year, meaning volatility for front-month contracts is sitting in the middle of the road, historically speaking.

  • Finally, ZNGA slipped 1.9% today to land at $3.06, as the shares continue to be pressured lower by their descending 20-day moving average. Nevertheless, bullish betting has been faster than usual on the equity in recent months, as evidenced by its 50-day ISE/CBOE/PHLX call/put volume ratio of 6.65. Not only does this metric indicate long calls have outstripped long puts by a better than 6-to-1 margin in the last 10 weeks, but the ratio has been exceeded just 3% of the time in the previous year. Meanwhile, those hoping to pick up short-term Zynga Inc options will pay a fairly typical price right now. The stock's SVI of 61% ranks in the 44th percentile of its annual range.

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