Stocks quoted in this article:
The 20 stocks listed in the table below are the S&P 400 MidCap Index (MID) components that 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 today is Advanced Micro Devices, Inc. (NYSE:AMD), which has seen notable buy-to-open activity at a near-the-money strike.
Short-term options in Advanced Micro Devices, Inc.'s options pits are seeing increased demand this afternoon, per the equity's 30-day at-the-money implied volatility (IV), which is up 0.9% to 50.0%. Most active overall is the weekly 8/8 4-strike put, where nearly 5,600 contracts are on the tape. Nearly 90% have changed hands at the ask price, and IV has soared 14.9 percentage points to 69.4%, collectively suggesting the contracts are being bought to open.
The traders are paying a volume-weighted average price (VWAP) of $0.08 for the near-the-money puts. In order to profit, the buyers need AMD shares to tumble below $3.92, or the strike price less the VWAP, by Friday's close -- when the weekly contracts expire. The stock was last seen south of that breakeven mark as recently as last Friday, but a recent rally -- including today's 1.6% pop -- has the equity perched near $4.07.
Should Advanced Micro Devices, Inc. (NYSE:AMD) be hovering below $3.92 at week's end, the put buyers' gains will accumulate on a move down to zero for the shares. However, if the stock is sitting above the strike at that point, the traders risk parting with the initial premium paid.