Stocks quoted in this article:
The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest this afternoon is Advanced Micro Devices, Inc. (NYSE:AMD).
With Advanced Micro Devices, Inc. up 2.7% today to linger near $4.25, calls are easily winning the numbers race. At last check, roughly 80,000 calls have changed hands, compared to fewer than 8,000 puts. Approximately one-fifth of the day's call volume was a result of a large lot of 16,000 April 5 calls, which traded for $0.30 apiece. A similarly sized block was sold to open on Dec. 16, and with implied volatility (IV) lower this afternoon, it could be indicative of buy-to-close activity.
Elsewhere, another AMD speculator used a number of calls to bet on neutral-to-bearish price action in the near term. Specifically, one block of 2,000 weekly 1/31 4-strike calls changed hands at the bid price of $0.42, while a symmetrical block of weekly 1/31 4.50-strike calls simultaneously crossed the tape at the ask price of $0.22. Implied volatility rose with each transaction, pointing to the initiation of new positions.
By establishing the short call spread, the trader can pocket the full potential reward of $0.20, or the net credit collected, as long as AMD falls south of $4 by the close on Friday, Jan. 31. The maximum loss, on the other hand, is limited to $0.30, or the difference between the two strikes less the net credit. Breakeven for the spread sits at $4.20, which is the sold strike plus the initial credit received.
On the fundamental front, the lifetime of these weekly calls encompasses the semiconductor concern's quarterly earnings report, which is slated for release after next Tuesday's close. Despite besting analysts' bottom-line estimates in six of the past eight quarters, AMD has averaged a respective loss of 5.8% and 7.8% in the subsequent day and week. For Advanced Micro Devices, Inc.'s (NYSE:AMD) fourth quarter, Wall Street is calling for a per-share profit of 6 cents -- a 20-cent improvement over its year-ago loss.