Put Activity Follows Advanced Micro Devices' (AMD) Gains
5/31/2000 3:22:25 PM
During yesterday's market jubilation, Advanced Micro Devices (AMD ? 81-13/16) put in a stellar performance. The shares appreciated by 11 points, or almost 15 percent. This move catapulted the shares through 10,426 contracts of open interest sitting on the June 80 call, the site of peak open interest. Furthermore, the 80 mark is also the site of the stock's 10-day moving average, a trendline that gave the equity some trouble earlier this month. The 80 level has also proven itself technically significant in the past (see the chart below). During mid-morning, the shares looked as if they were going to test the 80 strike, but pulled up short at 81-1/8.
According to information obtained from Schaeffer's Daily Sentiment, Schaeffer's put/call open interest ratio (SOIR) on AMD has been relatively stagnant around the 0.40 to 0.49 area for the past two weeks (see the chart below). Today, activity on the put side has picked up, as 3,327 contracts have traded on the June 80 put. With 4,786 contracts already open on the option, we will have to wait until tomorrow to see if this activity translates into new open positions.
A hold at the 80 level and increased pessimistic options activity could bode well for AMD. But before taking a stance on the stock, we must see more pessimism on the shares as they secure the current levels.
See charts here schaeffersresearch.com |
