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What large put seller is seeing in AMD
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.
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