Options Traders Blaze a Path Toward NVIDIA, AMD Stocks – Schaeffers Research (blog)

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The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Stocks highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer’s Senior Quantitative Analyst Rocky White. Two names of notable interest are semiconductor stocks NVIDIA Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD). Here’s a quick look at how options traders have been placing their bets on shares of NVDA and AMD.   

most active options

NVDA Options Traders Take Sides Ahead of Earnings

NVDA stock is down 0.1% today at $103.71, as the company prepares to release earnings after the close on Tuesday. The shares have found a short-term foothold atop their 50-day moving average, but still remain below their year-to-date breakeven level at $106.74. Meanwhile, options data suggests traders are placing bets on both sides of the aisle ahead of earnings. 

For instance, NVDA has a 10-day call/put volume ratio of 1.58 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which shows call buying has maintained an edge over put buying during the past two weeks. More bulls seem to be striking today, too, with some buy-to-open activity likely taking place at the weekly 5/12 120-strike call. 

However, the most popular option during the past two weeks, based on open interest added, was the weekly 5/12 98-strike put, and it looks like the bulk of the activity occurred last Tuesday when a block of 14,500 contracts was bought to open for $3.1 million (number of contracts * $2.15 premium paid * 100 shares per contract). This would suggest the trader initiated the position, anticipating NVIDIA stock will breach $98 by the end of this week, when the contracts expire. 

Options Traders Place Bullish Bets on AMD Stock

AMD stock, meanwhile, is trying to bounce back from its post-earnings bear gap from last week, but weakness from sector peer Micron Technology, Inc. (NASDAQ:MU) could be holding back the shares today. AMD was last seen 1.3% lower at $10.06, but the shares are finding solid support from their 200-day moving average. And it certainly looks like options traders are betting on a rebound. 

Data from the ISE, CBOE, and PHLX shows nearly 240,000 call options were bought to open during the past two weeks, compared to about 76,300 puts. In fact, the 10 largest increases in open interest during the past two weeks were all calls.

The top three open interest gainers were the front-month May 10.50, 11, and 11.50 calls, and notable buy-to-open activity has taken place at each, though there was also heavy sell-to-open action at the latter strike. Meanwhile, the longer-term July 11 and 17 calls also saw heavy buying activity, as options traders bet on Advanced Micro Devices stock rising on the charts in the months ahead. 

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