2 Chip Stocks Face More China Headwinds

Options traders are targeting AMD and INTC today

Deputy Editor
Apr 12, 2024 at 10:54 AM
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Semiconductor stocks Advanced Micro Devices Inc (NASDAQ:AMD) and Intel Corp (NASDAQ:INTC) are under fire today, after a report from the Wall Street Journal indicated regulators in China earlier this year told the country's biggest telecommunication companies to curb foreign chips. The report is watering down upbeat sentiment that's followed advancements in artificial intelligence (AI) semiconductors.

At last glance, AMD is down 4.2% to trade at $163.35. Despite the 27.6% drawdown from its March 8, all-time high of $227.30, the 10% year-to-date level is getting tested as support, as is the shares' 100-day moving average. 

Options traders are moving in on semiconductor stock. So far, 222,000 calls and 189,000 puts have crossed the tape, which is double the average intraday volume. New positions are opening at the top nine contracts, led by the weekly 4/12 162.50-strike put.

Intel stock isn't faring any better, was last seen down 3.6% to trade at $36.29, heading for its seventh loss in nine sessions and its fourth weekly loss in the last five. Coming into today, INTC was already an underperformer, down 28% in 2024 against the VanEck Semiconductor ETF's (SMH) 27.7% year-to-date gain.

The stock's options pits are also exploding with activity. Already today, 58,000 calls and 47,000 puts have crossed the tape, which is double the volume typically seen at this point. Most popular is the weekly 4/12 37-strike put.

 

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