With front-month options expiration looming at the end of the week, put players on Wednesday took the opportunity to adjust their positions on chip stock Advanced Micro Devices, Inc. (NYSE:AMD - 4.14). During the course of the session, a batch of front-month put traders liquidated their bets ahead of expiration, while longer-term skeptics added fresh contracts in the January 2013 series.

Starting with the front-month action, AMD's August 4.50 put saw 2,772 contracts cross the tape on Wednesday, with 96% of those crossing near the bid price -- suggesting they were sold. Open interest at this soon-to-expire strike dropped overnight by 2,056 contracts, confirming that traders were closing out their 4.50-strike puts.

Meanwhile, the January 2013 3-strike put traded volume of 2,000 contracts yesterday, all of which changed hands at the ask price. Open interest here surged overnight by 1,918 contracts, revealing that speculators bought to open new puts at this strike on Wednesday. Given the volume-weighted average price (VWAP) of $0.16, these puts won't become profitable unless AMD drops below $2.84 prior to January expiration.

With nearly 15% of the stock's float dedicated to short interest, AMD is no stranger to bearish speculation. However, with the shares down about 22% year-to-date, it's easy to understand why traders are so pessimistic. AMD has been ushered lower by its 20-day and 40-day moving averages since late April, and a recent breakout above the former trendline was halted by newfound resistance in the $4.50 area.

At last check, AMD is off about 1%, pressured by a price-target cut to $4 from $5 at ThinkEquity.