Breaking Down This Six-Figure Advanced Micro Devices, Inc. (AMD) Bet

Advanced Micro Devices, Inc. (NASDAQ:AMD) popped 1.1% yesterday to close at $2.66, following the departure of a trio of senior executives and the appointment of a new CEO. These developments brought options traders to the table, with puts especially popular -- crossing at nine times the average daily clip.

Drilling deeper, the session's highlight was a 25,000-contract lot of February 2.50 puts that was bought to open, according to Trade-Alert. The speculator shelled out a premium of $0.17 per contract, or a total of $425,000 (number of contracts * premium paid * 100 shares per contract), to gamble on AMD settling below $2.50 at February options expiration -- a time frame which includes the company's fourth-quarter earnings report, slated for release after the close next Tuesday, Jan. 20. If this fails to happen, the most the trader will part with is the initial premium paid -- a significant sum, but chump change compared to last week's $3.5 million wager.

Meanwhile, bearish betting has hit fever pitch at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). Advanced Micro Devices, Inc.'s (NASDAQ:AMD) 10-day put/call volume ratio of 14.40 is higher than all other readings from the last 12 months. This doesn't come as a shock, given the stock's year-over-year deficit of 38.1%.