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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: Milan Shah who wrote (221713)	12/28/2006 11:32:47 PM
From: gzubeck	Respond to of 275872

Barring AMD comes out at earnings and hector claims they're having a hard time manufacturing at 65nm I would think AMD closes close to $25 around expiration...easy money for put writers...

To: Milan Shah who wrote (221713)	12/29/2006 2:38:16 AM
From: Magrathea	Respond to of 275872

Re: Theories on the 100000+ Contracts on Jan 20 Puts. I'll freely admit my ignorance. I gather data and see what pops out. Here is some info to chew on. (data from MaxPain Raw tables) iqauto.com 07 Jan Open Interests: as of: call 17.5 19.0 20.00 22.50 25.00 Put17.5 19.0 20 22.5 25 060714 3155 6204 21774 11427 15669 000 15411 11186 21034 060817 4749 653 11351 26360 19311 16942 304 19045 13474 20566 060916 4723 659 9575 25509 21634 19256 719 17154 15220 25407 061016 4687 549 10285 24888 23951 19265 2702 19796 15406 26398 061019 4687 550 9850 24890 26826 19259 2789 19938 15555 26635 061020 (not avail.) 061023 4771 679 11003 28811 27914 20152 3375 98894 19701 26732 061101 5111 925 12546 32181 31200 19290 4740 98256 22089 22506 On thing is certain. The 80000 contract increase on Oct. 23 was no retail transaction. The contracts were written on Oct 19 or 20. (Remember, Open Interest on the 10/19 report is, I think, End of Day 10/18, begining of day 10/19). AMD reported on Oct 18. it closed on Oct 18 at 24.23. It Opened Oct 19 at 21.99 and close 21.01. Someone wrote 80000 contracts of $20 puts. (8 million shs worth) which is a promise to buy at 20 if price is lower than 20. Someone bought them somewhere between 1.20 and 1.70. Too Big, Too Targeted, Too Fast for retail transactions. JMO. In November, there were 36063 Puts at 22.50 and only 12774 Calls at 20. AMD closed at 21.45, $1.05 into the money of the big Put position. A failure of Max Pain. Given the big put position in Nov at 22.50 didn't support the price, and given the targeted nature of the 80000 contracts written on the Jan 20 Puts, I have to wonder if those 80000 contracts are really going to act as support. -Magrathea