Bulls Blast Semiconductor Heavyweight Ahead of Earnings

Options players are eyeing more upside for Advanced Micro Devices stock

Deputy Editor
Apr 28, 2020 at 12:16 PM
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Chipmaker Advanced Micro Devices, Inc. (NASDAQ:AMD) is getting ready to head into the earnings confessional after the close this evening, and options bulls are already paying attention. So far today, 131,000 calls have crossed the tape, compared to 40,000 puts. The weekly 5/1 65-strike call is by far the most popular, with positions being opened here. AMD currently sits a $56.02, just within reach of its Feb. 19 all-time high of $59.27. This means these traders are eyeing another round of fresh highs for the equity, by the time these contracts expire this Friday, May 1. 

Looking back, however, puts have rarely been more popular, While calls are still outnumbering puts at an overall volume, the equity's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the top percentile of its annual range.

AMD has joined several of its sector peers, as it makes its way back towards its all-time highs. The stock's mid-March pullback was deftly caught by its 200-day moving average, and now the security is pushing back up against the $57 region. For the year, the equity boasts an impressive 22.2% year-over-year gain. 

AMD April 28

Despite this positive price action, Wall Street is still split on the tech name. Half of the 22 analysts in coverage consider AMD to be a "buy" or better, while the other 11 say "hold." Meanwhile, the consensus 12-month price target of $50.99 is a 9% discount to current levels, leaving plenty of room for upgrades and price-target hikes for the future.

Looking back at the last eight quarters, the chip stock has managed some wild post-earnings swings in both directions, including a 19.9% surge in January 2019, and a 15.4% drop in October 2018. AMD enjoyed positive returns during half of these post-earnings sessions, averaging a next-day move of 10.3%, regardless of direction. This time around, the options market is pricing in a sightly bigger 13.1% swing. 

 

 

 

 

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