Pete Najarian noticed unusual options activity in Advanced Micro Devices, Inc. (NASDAQ: AMD) for this week’s $117-strike calls on Friday. On Wednesday, institutions continued to hammer call contracts of AMD despite the stock trading lower.
WCCF Tech reported AMD will become the Taiwan Semiconductor Manufacturing Co. Ltd.’s (NYSE: TSM) largest customer and there is a rumor TSMC may provide the chips needed for the Apple Inc (NASDAQ: AAPL) electric vehicle.
Immediately following the report AMD shot up over 1% higher before, giving all the gains back and trading toward its daily low.
Options traders weren’t deterred by the stock’s overall negative reaction to the news and continued to purchase bullish call contracts. Over the course of the day, traders bet more than $1.61 million AMD will see higher prices in the future.
The options traders may not care about the news and instead could be betting AMD will make a technical break up to a new all-time high.
AMD is trading in a bull flag pattern on the daily chart with the pole created between July 28 and Aug. 4 and a flag between Aug. 5 and Wednesday.
Why It’s Important: When a sweep order occurs, it indicates the trader wanted to get into a position quickly and is anticipating an imminent large move in stock price. A sweeper pays the market price for the call or put option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.
These types of option orders are usually made by institutions, and retail investors can find watching for sweepers useful because it indicates “smart money” has entered into a position.
The AMD Trades: Below is a look at the notable options alerts, courtesy of Benzinga Pro:
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At 10:03 a.m., a trader executed a call sweep near the ask of 1000 Advanced Micro Devices options with a strike price of $115 expiring on Aug. 27. The trade represented a $71,000 bullish bet for which the trader paid 71 cents per option contract.
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At 10:09 a.m., a trader executed a call sweep near the ask of 245 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $45,325 bullish bet for which the trader paid $1.85 per option contract.
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At 10:10 a.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $37,400 bullish bet for which the trader paid $1.87 per option contract.
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At 11:29 a.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $28,800 bullish bet for which the trader paid $1.44 per option contract.
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At 10:18 a.m., a trader executed a call sweep above the ask of 303 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $54,237 bullish bet for which the trader paid $1.79 per option contract.
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At 10:30 a.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $105 expiring on Aug. 20. The trade represented a $46,000 bullish bet for which the trader paid $2.30 per option contract.
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At 10:37 a.m., a trader executed a call sweep near the ask of 1167 Advanced Micro Devices options with a strike price of $110 expiring on Aug. 20. The trade represented a $56,016 bullish bet for which the trader paid 48 cents per option contract.
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At 11:27 a.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $105 expiring on Aug. 20. The trade represented a $40,200 bullish bet for which the trader paid $2.01 per option contract.
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At 11:30 a.m., a trader executed a call sweep at the ask of 481 Advanced Micro Devices options with a strike price of $150 expiring on Nov. 19. The trade represented a $96,681 bullish bet for which the trader paid $1.34 per option contract.
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At 11:32 a.m., a trader executed a call sweep at the ask of 581 Advanced Micro Devices options with a strike price of $150 expiring on Nov. 19. The trade represented a $79,016 bullish bet for which the trader paid $1.36 per option contract.
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At 11:32 a.m., a trader executed a call sweep at the ask of 329 Advanced Micro Devices options with a strike price of $150 expiring on Nov. 19. The trade represented a $44,744 bullish bet for which the trader paid $1.36 per option contract.
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At 12 p.m., a trader executed a call sweep at the ask of 300 Advanced Micro Devices options with a strike price of $120 expiring on Sept. 17. The trade represented a $39,300 bullish bet for which the trader paid $1.31 per option contract.
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At 12:16 p.m., a trader executed a call sweep at the ask of 1,200 Advanced Micro Devices options with a strike price of $102 expiring on Aug. 20. The trade represented a $372,000 bullish bet for which the trader paid $3.10 per option contract.
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At 12:27 p.m., a trader executed a call sweep at the ask of 258 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $37,926 bullish bet for which the trader paid $1.47 per option contract.
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At 12:28 p.m., a trader executed a call sweep at the ask of 253 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $39,721 bullish bet for which the trader paid $1.57 per option contract.
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At 12:28 p.m., a trader executed a call sweep at the ask of 215 Advanced Micro Devices options with a strike price of $105 expiring on Aug. 20. The trade represented a $44,290 bullish bet for which the trader paid $2.06 per option contract.
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At 12:28 p.m., a trader executed a call sweep at the ask of 441 Advanced Micro Devices options with a strike price of $110 expiring on Sept. 3. The trade represented a $102,753 bullish bet for which the trader paid $2.33 per option contract.
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At 12:28 p.m., a trader executed a call sweep at the ask of 218 Advanced Micro Devices options with a strike price of $106 expiring on Aug. 20. The trade represented a $35,752 bullish bet for which the trader paid $1.64 per option contract.
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At 12:28 p.m., a trader executed a call sweep at the ask of 505 Advanced Micro Devices options with a strike price of $109 expiring on Aug. 20. The trade represented a $37,370 bullish bet for which the trader paid 74 cents per option contract.
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At 12:29 p.m., a trader executed a call sweep at the ask of 210 Advanced Micro Devices options with a strike price of $107 expiring on Aug. 20. The trade represented a $27,300 bullish bet for which the trader paid $1.30 per option contract.
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At 12:29 p.m., a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $110 expiring on Aug. 27. The trade represented a $31,400 bullish bet for which the trader paid $1.57 per option contract.
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At 12:30 p.m., a trader executed a call sweep at the ask of 310 Advanced Micro Devices options with a strike price of $108 expiring on Aug. 20. The trade represented a $35,030 bullish bet for which the trader paid $1.13 per option contract.
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At 12:30 p.m., a trader executed a call sweep at the ask of 490 Advanced Micro Devices options with a strike price of $115 expiring on Oct. 15. The trade represented a $210,700 bullish bet for which the trader paid $4.30 per option contract.
AMD Price Action: Advanced Micro Devices shares were trading down 3.83% at $103.44 at market close Wednesday.
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