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Most Active Options Update: Advanced Micro Devices, Inc. (AMD)

Put option buyers bet against the rebound in Advanced Micro Devices, Inc.

by 8/20/2014 1:52 PM
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 is Advanced Micro Devices, Inc. (NYSE:AMD), which has been heavily targeted by put buyers in recent sessions.

Most Active Options Table

Over the past 10 trading days, speculative players have bought to open 16,640 calls and 16,112 puts on Advanced Micro Devices, Inc., according to data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). The resulting 10-day put/call volume ratio of 0.97 registers in the 88th percentile of its annual range, suggesting options players have shown a stronger-than-usual preference for bearish bets over bullish lately.

This is confirmed by AMD's Schaeffer's put/call open interest ratio (SOIR) of 1.09, with puts outnumbering calls among options set to expire within three months. This ratio ranks higher than 84% of other such readings taken over the past year, as short-term options players have been more put-heavy just 16% of the time.

In the front-month series, the site of peak put open interest is the September 4.50 strike, with 22,491 contracts outstanding. Based on data from the ISE, CBOE, and PHLX, at least half of this open interest was buyer-initiated.

AMD last traded above $4.50 on July 17, just prior to its poorly received second-quarter earnings report. Since the stock's post-earnings low of $3.67, AMD has rallied 15.8% to trade at $4.25. However, $4.50 has acted as resistance on multiple occasions over the last year, and put buyers at this strike are apparently betting on that trend to continue.

Meanwhile, it's not just options traders who are betting against the Advanced Micro Devices, Inc. (NYSE:AMD) rebound. Short interest on the tech stock rose by 36% during the most recent reporting period, and now represents 24.7% of AMD's float.


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