Call options were unusually active on Advanced Micro Devices, Inc. (NYSE:AMD - 2.08) on Thursday, with approximately 28,000 contracts crossing the tape -- or 1.29 times the equity's average daily call volume. Meanwhile, only 2,781 puts were traded on the chip stock, representing 18% of the norm.

AMD call players honed in on the November 2.50 strike, where 13,262 contracts changed hands. Nearly all of these contracts crossed at the ask price, indicating they were purchased, and implied volatility on this front-month call jumped 2.2 percentage points by the close. Open interest on the November 2.50 call rose overnight by 12,416 contracts, so it looks as though new bullish bets were initiated.

The volume-weighted average price (VWAP) on this option was $0.05, which means November 2.50 call buyers need AMD to rally above breakeven at $2.55 by the time front-month options expire. The stock finished Thursday at $2.12, so option bulls are banking on a gain of at least 16.9% over the next three weeks.

However, short interest on AMD has vaulted considerably higher in recent months, and now totals 22.6% of the stock's float. With so many bears betting on the shares to slide, it's possible that out-of-the-money calls are being purchased to hedge short stock positions, rather than to bet on a short-term bounce.

Looking ahead, President and CEO Rory Read is due to speak at a news conference next Monday, Oct. 29, "to provide updates and more detail on the company's ambidextrous strategy." Expectations for a big announcement may have prompted the recent uptick in speculative option volume on the stock.

On the charts, AMD is down about 61% year-to-date, woefully underperforming the broader equities market. However, the underfoot $2 level has provided support for the stock for over two decades.