A whopping 9,500 contracts of October 20 calls changed hands at Pacific Exchange, ahead of the Q3 release
attracts calls ahead of release
By Brenon Daly, CBS MarketWatch
Last Update: 4:09 PM ET Oct 6, 1998
StockWatch
SAN FRANCISCO (CBS.MW) -- Advanced Micro Devices topped
the most-active option list at the Pacific Exchange, ahead of the
chipmaker's third-quarter earnings release.
A whopping 9,500 contracts of October 20 calls (AMD=JD) changed
hands, putting AMD (AMD) in the unusual position of leading the volume
board. The options were the seventh most actively traded issue at the
Pacific Exchange in 1997.
The last sale on the call contract -- which gives the holder the right to buy
AMD shares at 20 anytime before Oct. 16 -- was 1 3/8, up 3/8. AMD
stock closed up 1 5/16 to 19 11/16.
AMD will report third-quarter results after the bell,
and analysts' average estimate is a loss of 13 cents
a share, compared to a loss of 22 cents a year
ago. See related story.
The outlook for AMD -- and other chip stocks
($SOX) -- appeared a bit brighter on Tuesday,
after Motorola Inc. (MOT) reported
better-than-expected semiconductor revenue. See
related story.
But one options trader said options players were a
bit troubled by the "disparity" among earnings
projection. The trader, who didn't give his name, said the range of
estimates he'd seen envision AMD losing as much as 30 cents per share
to making 4 cents per share in profit.
The range didn't worry the trader because AMD "always disappoints
anyway." The Sunnyvale, Calif.-based chipmaker has fallen short of
analysts' earnings expectations for the past two consecutive quarters.
"I'd be really surprised if AMD surprised on the upside," he said.
Brenon Daly is an online reporter for CBS MarketWatch. |
