Bearish Option Activity Alert: AMD

Bearish Option Activity Alert: AMD

Advanced Micro Devices, Inc. (AMD) is seeing unusual option volume this morning following the surprise exit of CEO Dirk Meyer last night. The Feb. 8 Calls and Jan. 9 Calls are seeing heavy selling pressure as investors seem to be ìbailing outî of their Bullish positions. The Feb. Calls have seen 14,788 contracts trade, 93% on the bids, and the Jan. Calls have seen 5,259 contracts trade with 75% on the bids. Total option activity during the first hour of trading has already doubled AMDís average daily contract volume.

This morning analystsí from both Wells Fargo and Raymond James lowered their ratings on the shares from ìMarket Performî to ìUnderperform helping push AMD down nearly 7%. The company will begin an immediate search for a permanent replacement that can help with its current legal battle with Intel and improve shareholders value. AMD will release their Q4 earnings on Jan. 20th with analysts calling for EPS of $.11.

About Patrick (Rick) Mortimer

Patrick(Rick)Mortimer is the Director of Options Trading at Pipeline Trading Systems LLC. With over 25 years of options trading experience as a Broker/Market Maker on the Philadelphia Stock Exchange he now provides daily insight into today’s complicated world of equity options trading. His daily alerts and commentary are valued by institutional asset managers and hedge funds and he is often quoted by well known financial news providers such as Bloomberg, CNBC, and Reuters. Pipeline’s equity and options clients have found his analysis useful in providing option strategy’s to increase alpha for current equity holdings as well as forecasting directional stock movement based on the underlying option activity.