Schaeffer's Trading Floor Blog
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Among the stocks attracting attention from options traders lately are semiconductor specialist Advanced Micro Devices, Inc. (NYSE:AMD), plus software providers Microsoft Corporation (NASDAQ:MSFT) and Adobe Systems Incorporated (NASDAQ:ADBE). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on AMD, MSFT, and ADBE.

  • With AMD down 16.3% from its Jan. 15 intraday high of $4.60 to trade at $3.85, puts have become the contracts of choice in the stock's options pits. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.08 ranks higher than 95% of comparable readings from the past 12 months, noting a near-annual-high rate of put buying, relative to call buying, during the past two weeks. Now is an opportune time to place short-term bets on Advanced Micro Devices, Inc., as the stock's Schaeffer's Volatility Index (SVI) of 43% ranks in the bottom 8% of its annual range, indicating short-term options are currently very cheap, from a volatility standpoint.

  • While MSFT shares have been running up the charts -- advancing 5.6% from their Feb. 6 intraday low of $35.69 to trade at $37.70 -- option traders have bought to open calls over puts at a faster-than-usual rate. Particularly, during the past 10 trading days, Microsoft Corporation has racked up an ISE/CBOE/PHLX call/put volume ratio of 2.03, which ranks in the 70th annual percentile. Short-term options are a steal right now, relatively speaking, with the stock's SVI of 18% ranking below 84% of similar readings from the past year.

  • Option bulls have placed bets on ADBE -- which has climbed 17.2% from its Feb. 3 intraday low of $57.32 to trade at $67.19 -- at an accelerated pace of late, compared to option bears. This is evidenced by the fact that the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 1.95 ranks in the 67th percentile of its 12-month range. With Adobe Systems Incorporated awaiting its turn in the earnings confessional after the close on Tuesday, March 18, prices on the equity's short-term options have spiked to annual-high levels, relatively speaking. In fact, ADBE's SVI of 45% ranks higher than all comparable readings from the past year.

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