Advanced Micro Devices Options Pop Before Earnings

The company reports earnings after the close on Tuesday, Nov. 1

Deputy Editor
Oct 24, 2022 at 2:03 PM
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Shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) are trading at $58.32, down 0.9% at last glance and adding to an already steep 59.6% year-to-date deficit. The stock's 20-day moving average has moved between support and resistance for much of the year, but has weighed on AMD ever since stunting a late-August rally. While Wall Street will dig through a deluge of Big Tech earnings this week, traders will have to wait until next week for the semiconductor concern to step into the earnings confessional.
 

AMD MAO Chart October 242022

The company is slated to report after the close on Tuesday, Nov. 1. The options pits are pricing in a post-earnings swing of 8.5%, which is much larger than the 4.4% post-earnings move the stock averaged over the past two years. AMD was negative following five of these last eight sessions, including a 1.2% drop after its August report. 

Amid the downtrend it's faced over the course of the year, Advanced Micro Devices stock is on Schaeffer's Senior Quantitative Analyst Rocky White's list of names that have attracted the highest weekly options volume within the past two weeks. According to this data, 2,942,577 calls and 2,635,962 puts were exchanged in this two-week time period. The October 60 call was the most popular contract by far during this time, followed by the 57 put from the same monthly series.

MAO Chart October 242022

This reading equates to a 10-day put/call volume ratio of 0.75 over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 95th percentile of its annual range. In other words, these traders have had a healthier-than usual appetite for long puts in the last 10 weeks, even though calls have outpaced puts on an overall basis.

These options traders are in luck, too, as now seems like an ideal time to weigh in on AMD's next move higher. Advanced Micro Devices stock has usually outperformed volatility expectations, per its Schaeffer's Volatility Scorecard (SVS) ranking of 97 out of 100.

 

 

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