AMD Rallies, Options Traders Hammer Calls

Advanced Micro Devices, Inc AMD has advanced over 5% higher this week. On Monday, AMD put in a bottom at $84.24 and bucked the downtrend after it was reported AMD’s Radeon RX 6600 XT and Radeon RX 6600 graphics cards are set to launch Aug. 11.

Next Tuesday, AMD will print its second-quarter 2021 earnings after the markets close. When the semiconductor company reported first-quarter earnings on April 27, it blew analyst estimates out of the water. AMD reported revenues of $3.45 billion, well over the consensus estimate of $3.21 billion and earnings per share of 52 cents, which beat the estimate of 44 cents. AMD also increased revenue guidance for the second quarter.

Options traders believe AMD has more room to run and on Wednesday the traders hammered AMD call contracts. Together the orders totaled $943,058 with the largest order worth $232,932 for 826 call contracts with a strike price of $90 and an expiry of Aug. 20.

See Also: How to Buy AMD Stock: History, Outlook & More

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 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:

• At 9:30 a.m., a trader executed a call sweep near the ask of 826 AMD options with a strike price of $90 expiring on Aug. 20. The trade represented a $232,932 bullish bet for which the trader paid $2.82 per option contract.
• At 9:31 a.m., a trader executed a call sweep at the ask of 200 AMD options with a strike price of $87 expiring on July 23. The trade represented a $27,000 bullish bet for which the trader paid $1.35 per option contract.
• At 9:33 a.m., a trader executed a call sweep near the ask of 745 AMD options with a strike price of $88 expiring on July 23. The trade represented a $67,050 bullish bet for which the trader paid 90 cents per option contract.
• At 9:37 a.m., a trader executed a call sweep near the ask of 208 AMD options with a strike price of $87.50 expiring on July 23. The trade represented a $31,616 bullish bet for which the trader paid $1.52 per option contract.
• At 9:38 a.m., a trader executed a call sweep near the ask of 224 AMD options with a strike price of $100 expiring on Sept. 17. The trade represented a $37,632 bullish bet for which the trader paid $1.68 per option contract.
• At 9:39 a.m., a trader executed a call sweep at the ask of 325 AMD options with a strike price of $85 expiring on July 23. The trade represented a $120,250 bullish bet for which the trader paid $3.70 per option contract.
• At 9:40 a.m., a trader executed a call sweep near the ask of 225 AMD options with a strike price of $90 expiring on July 30. The trade represented a $49,500 bullish bet for which the trader paid $2.20 per option contract.
• At 9:52 a.m., a trader executed a call sweep near the ask of 200 AMD options with a strike price of $87.50 expiring on July 23. The trade represented a $29,000 bullish bet for which the trader paid $1.45 per option contract.
• At 10:07 a.m., a trader executed a call sweep near the ask of 270 AMD options with a strike price of $92 expiring on July 30. The trade represented a $45,090 bullish bet for which the trader paid $1.67 per option contract.
• At 10:39 a.m., a trader executed a call sweep near the ask of 455 AMD options with a strike price of $95 expiring on Aug. 20. The trade represented a $79,170 bullish bet for which the trader paid $1.74 per option contract.
• At 10:39 a.m., a trader executed a call sweep near the ask of 328 AMD options with a strike price of $95 expiring on Aug. 20. The trade represented a $57,072 bullish bet for which the trader paid $1.74 per option contract.
• At 10:41 a.m., a trader executed a call sweep near the ask of 314 AMD options with a strike price of $95 expiring on Aug. 20. The trade represented a $54,636 bullish bet for which the trader paid $1.74 per option contract.
• At 11:11 a.m., a trader executed a call sweep near the ask of 222 AMD options with a strike price of $88 expiring on July 23. The trade represented a $37,518 bullish bet for which the trader paid $1.69 per option contract.
• At 11:11 a.m., a trader executed a call sweep near the ask of 222 AMD options with a strike price of $88 expiring on July 23. The trade represented a $37,296 bullish bet for which the trader paid $1.68 per option contract.
• At 11:11 a.m., a trader executed a call sweep near the ask of 222 AMD options with a strike price of $88 expiring on July 23. The trade represented a $37,296 bullish bet for which the trader paid $1.68 per option contract.