Advanced Micro Devices stock tends to underperform in October
Increased interest in artificial intelligence (AI) has boosted chip stocks so far this year, with the VanEck Semiconductor ETF (SMH) up 43.1% in 2023. Sector stalwart Advanced Micro Devices Inc (NASDAQ:AMD) is outperforming the SMH, up 60.7% year to date. However, over the last three months, AMD has shed 24% off its June 13 2023 peak of $132.83, and at last glance, is down 2.2% at $101.77 today. To make matters worse, stock is entering a historically bearish month.
Schaeffer's Senior Quantitative Analyst Rocky White just released his list of the worst S&P 500 Index (SPX) stocks to own in October. AMD is the only semiconductor stock to land on the list, averaging a loss of 3.7% in October and ending the month lower 60% of the time.
Options traders looking to speculate on AMD's short-term trajectory should consider options. The equity's Schaeffer's Volatility Index (SVI) of 49% is higher than just 13% of all other readings from the past year, suggesting near-term option contracts are attractively priced at the moment, from a historical volatility standpoint.
What's more, the security's Schaeffer's Volatility Scorecard (SVS), which sits at an elevated 76 out of 100, suggesting it exceeded option traders' volatility expectations during the past year.