What large put seller is seeing in AMD

RELATED QUOTES

SymbolPriceChange
AMD2.40+0.06

Shares of Advanced Micro Devices have plummeted some 73 percent in the last eight months, but one trader apparently believes that the chip maker will hold support levels through mid-2013.

optionMONSTER's real-time scanners detected the sale of 7,150 July 1.50 puts in a single print for $0.14 on Friday. The volume was above the strike's open interest of 5,513 contracts, showing that this is a new position.

The trade could be tied to some bullish July 2 call buying a few seconds later, but that volume was below open interest and could therefore be opening or closing positions. Total AMD option volume at all strikes was 4 times its daily average for the last month.

AMD rose 7.84 percent on Friday to close at $2.20, a far cry from the levels above $8 where it traded as recently as April. In recent weeks the stock nearly fell below their all-time intraday low of $1.62 reached in November 2008, but shares have been climbing in the last few days.

Friday's short puts are looking for the stock to hold above their $1.50 strike price by mid-July next year. If AMD is below this level by that expiration, the trader faces the obligation to buy the stock for an effective price of $1.36 when the $0.14 credit from the put sale is included. (See our Education section)

The company is scheduled make a presentation at the Raymond James IT Supply Chain Conference on Dec. 11.

More From optionMONSTER

Search