Options Flow Summary: QCOM & AMD

---

Qualcomm (QCOM)
There has been significant flow in QCOM today, with 85,000 contracts on the tape. This is nearly twice QCOM's average daily volume. Near noon on the PHLX today, a customer bought the August 40/45 risk reversal for $.325 15,000 times in a delta neutral trade.  The stock is currently trading at $43.05. This position provides highly leveraged exposure through earnings on July 18 and the summer months. 

Other activity in QCOM has been concentrated in the Jan-08 50 calls. There has been  consistent buying throughout the morning for $1.75.  This culminated in a block of 5000 crossed on the CBOE for $1.80 just before noon.  Similar to the risk reversal, this is an upside play and suggests an active summer for the name.

ADVERTISEMENT
Advanced Micro Devices (AMD)
A large block combination traded in Jan 08 options on the ISE today.  The stock level is near $14.50.  Just after noon a customer paid $3.40 for the 14 strike put and 15 strike call strangle 20,000 times. The total premium on the trade is $6.8 million.  This trade will create a significant position at those strikes. 

With implied volatility levels close to 45%, this isnít a trade based on "cheap" volatility.  The initiator of this trade is most likely looking for increasing price swings in the stock over the rest of the year to capture frequent gamma-hedging profits.

"

---

View Henry Schwartz's post archive >