AMD's Stock Forms Powerful Chart Pattern, Options Traders Pile In

Advanced Micro Devices, Inc. AMD last week announced its AMD EPYC 7002 processors are being used to power the new Hewlett Packard Enterprise HPE Alletra 6000. The Alletra 6000 enables businesses, through a cloud service, to better handle and utilize data.

The news helped AMD close up 1.87% on the day (June 10) but it wasn’t able to break above a resistance level at $83.40. AMD has, in its consolidation, formed a potentially powerful weekly bull flag pattern and on Monday a number of options traders purchased $375,365 worth of call contracts.

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 market price for the call option instead of placing a bid, which sweeps the order book of multiple exchanges to fill the order immediately.

These types of call 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:

• At 9:31 a.m., Monday a trader executed a call sweep at the ask of 200 Advanced Micro Devices options with a strike price of $82.50 expiring on July 16. The trade represented a $43,400 bullish bet for which the trader paid $2.17 per option contract.
• At 9:46 a.m., a trader executed a call sweep at the ask of 294 Advanced Micro Devices options with a strike price of $81 expiring on June 18. The trade represented a $29,106 bullish bet for which the trader paid 99 cents per option contract.
• At 9:47 a.m., a trader executed a call sweep at the ask of 283 Advanced Micro Devices options with a strike price of $81 expiring on June 18. The trade represented a $35,375 bullish bet for which the trader paid $1.25 per option contract.
• At 9:47 a.m., a trader executed a call sweep at the ask of 285 Advanced Micro Devices options with a strike price of $81 expiring on June 18. The trade represented a $29,355 bullish bet for which the trader paid $1.03 per option contract.
• At 9:47 a.m., a trader executed a call sweep at the ask of 468 Advanced Micro Devices options with a strike price of $81 expiring on June 18. The trade represented a $51,012 bullish bet for which the trader paid $1.09 per option contract.
• At 9:49 a.m., a trader executed a call sweep near the ask of 301 Advanced Micro Devices options with a strike price of $81 expiring on June 18. The trade represented a $32,508 bullish bet for which the trader paid $1.08 per option contract.
• At 9:49 a.m., a trader executed a call sweep at the ask of 293 Advanced Micro Devices options with a strike price of $81 expiring on June 18. The trade represented a $31,351 bullish bet for which the trader paid $1.07 per option contract.
• At 9:50 a.m., a trader executed a call sweep near the ask of 825 Advanced Micro Devices options with a strike price of $81 expiring on June 18. The trade represented a $90,750 bullish bet for which the trader paid $1.10 per option contract.
• At 11:02 a.m., a trader executed a call sweep at the ask of 400 Advanced Micro Devices options with a strike price of $81.50 expiring on June 18. The trade represented a $32,508 bullish bet for which the trader paid 80 cents per option contract.

AMD Price Action: Shares of Advanced Micro Devices were trading around $81.24 at publication time.