Upgraded AMD Stock Jumps After Soros Boosts Stake

Options traders have been call-heavy toward AMD during the past two weeks of trading

by Emma Duncan

Published on May 16, 2018 at 10:24 AM
Updated on May 16, 2018 at 10:53 AM

Chip manufacturer Advanced Micro Devices, Inc. (NASDAQ:AMD) is trading higher this morning, after the stock received an upgrade from Susquehanna to "neutral" from "negative," and a price-target hike to $11 from $8. This lift came just after a Securities and Exchange Commission (SEC) filing revealed Soros Fund Management upped its stake in AMD by 365,700 shares to 392,000 shares. What's more, earlier this week, J.P. Morgan Securities noted AMD's historically bullish returns following the recent CoinDesk Consensus blockchain conference.

AMD was up 3.6% at $12.90, at last check, continuing its recent run higher on the charts, most recently surging off its April 4 annual low of $9.04. Longer term, the stock has been in a choppy channel of lower highs since topping out at a 10-year high of $15.65 last July,and is up 25% year-to-date.

In the options pits, traders have been buying to open calls over puts at a much faster-than-usual clip over the past two weeks. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows AMD with a 10-day call/put volume ratio of 2.95, which ranks in the 70th annual percentile. However, some of this could be at the hands of nervous short sellers, who control 21.7% of the stock's float.

Regardless, those purchasing premium on the chipmaker are in luck. The stock's Schaeffer's Volatility Index (SVI) of 41% ranks in just the 6th annual percentile, suggesting short-term options have rarely been cheaper, from a volatility standpoint.

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