Q2 STOCKS TO BUY

Options Bulls Pounce as AMD Hits Record High

The weekly 1/3 series is hot on AMD stock today

Jan 2, 2020 at 2:47 PM
facebook X logo linkedin


Advanced Micro Devices, Inc. (NASDAQ:AMD) is at the top of the S&P 500 Index (SPX) today, after Nomura Instinet boosted its price target on the chip stock to $58 from $40 -- a 26.5% premium to AMD's 2019 close at $45.86. In reaction, the shares are up 6% at $48.60, earlier hitting a record high of $48.78.

The sharp spike higher has sparked a fire in the options pits, with 535,000 contracts on the tape so far, more than double what's typically seen at this point. The bulk of the action has occurred on the call side, with buy-to-open activity detected at the weekly 1/3 47-strike, 47.50-strike, and 48-strike calls. If this is the case, call buyers see bigger gains for AMD stock through tomorrow night's close, when these weekly options expire.

There's already a notable bullish bias among AMD options traders. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 10-day call/put volume ratio of 2.37 registers in the 66th annual percentile, meaning calls have been bought to open over puts at a quicker-than-usual clip.

Elsewhere on Wall Street, though, sentiment is more skeptical. For starters, 14 of 22 analysts maintain a lukewarm "hold" rating, and the average 12-month price target of $38.31 is a discount to current trading levels.

Plus, despite short interest falling 5.8% in the most recent reporting period, bears still control more than 9% of Advanced Micro Devices' available float. Should AMD stock continue to build on its 158% year-over-year gain, more bullish brokerage notes and/or additional short covering could create bigger tailwinds.

amd stock daily price chart on jan 2

 
 

“Buy This Stock Now!” - Expert Who Called 11x On TSLA

He called a rare 11x on Tesla…

But now, thanks to Elon & Trump’s new alliance…

He says there’s a new opportunity that could be 1,000x BIGGER than Tesla – and it could completely revolutionize a $23 Trillion market.

It’s trading for less than $5 per share right now…

But it won’t be under the radar for long.

Discover The 1,000x Bigger Elon Opportunity Here

GRAND SLAM COUNTDOWN

 
 

Featured Articles from Trusted Partners:

👀Learn How Dividends Create Passive Income for Life
Receive $200 Off Motley Fool Epic. The Motley Fool Epic $299 discounted offer is based on $499/year list price. Introductory promotion for new members only. Take control of your money and your portfolio with Motley Fool Epic.

💵New Income System Could Pay You $4,243 Monthly
You could collect an average of $4,243 per month starting as early as next week with a new payout system for income investors. New registrations are being accepted for investors who want to be in a position to start with their first payout next week.

🚀Easy 92% Crypto Dividends (No Coins Required)
COIN stock doesn't pay a dividend... But there's actually a new way to collect a massive dividend that's indirectly based on the stock and offers a terrific monthly income (currently yielding nearly 92% on a forward basis).

🤝Free Advisor Match with Wiseradvisor.com
Don't leave your retirement to chance! Get matched with a trusted financial expert for FREE and make the most of your tax refund. Get started now.

⚠️Dennis Quaid's #1 Warning for Americans
Here's the thing: life doesn't come with guarantees. The economy shifts, markets stumble, and years of hard work could slip through your fingers like sand. But it doesn't have to be that way for you. So request a free copy of this Gold & Silver Guide that will arrive right to your doorstep when you act now.

 

 
 

Follow us on X, Follow us on Twitter