A Look At AMD's Options Activity, Short Interest

Advanced Micro Device, Inc. AMD stock is up about 3.5 percent Wednesday on a weak day for the market. Here’s a brief overview of the factors in play.

Option Alerts

The trading action in AMD started Tuesday when Benzinga Pro’s Signals feed sent out 32 options alerts on AMD throughout the day, most of them related to large bearish option trades. The stock finished Tuesday’s session down 1.2 percent and started out Wednesday’s session with relatively little volatility.

Around 10:30 a.m. Wednesday, however, AMD jumped more than 5 percent as traders circulated a rumor of a potential buyout. There appears to be no substantiated evidence of any M&A negotiations or any other fundamental company news driving the big move.

Technical trading may also be playing a role in AMD’s strange trading activity. The stock’s 50-day simple moving average is sitting at $11.98, and the 200-day simple moving average is at $12.28, making the $12 level a potentially important line in the sand for both bulls and bears.

Short Interest

A wildcard in the AMD mix is the stock’s large outstanding short interest. According to financial analytics firm S3 Partners, AMD short interest stands at $1.96 billion, the fifth most in the global semiconductor industry. Analyst Ihor Dusaniwsky says 2018 is off to a rough start for semiconductor shorts, and AMD has been particularly harsh. Dusaniwsky estimates AMD short sellers are already down $381.8 million overall this year.

“Losses have not stopped Semiconductor short sellers from increasing their exposure to the sector,” Dusaniwsky told Benzinga. “Worldwide short interest is now $38.8 billion, up $3.8 billion in just the last month.”

S3 data suggests Intel Corporation INTC remains the most popular short-selling target in the semiconductor space with more than $5.2 billion in short interest.

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