Call Buyers Flock to Advanced Micro as Chipmaker Wins Business From Microsoft and Meta


Advanced Micro Devices lit up the options market yesterday after being included in the world’s biggest social network.

The three busiest contracts across the entire options market were short-term AMD calls expiring this Friday, November 12. They outpaced other underlies like the SPDR S&P 500 ETF (SPY), Apple (AAPL) and Tesla (TSLA), which normally see much higher volumes.

  • The 12-November 150 calls traded almost 160,000 contracts, more than 22 times open interest. Premiums started at $0.71 a few seconds after the opening bell and shot as high as $7.65 as AMD peaked two hours later.
  • The 12-November 155 calls changed hands 141,600 times. They spiked from $0.38 to $5.60.
  • The 12-November 160 calls saw volume jump past 108,000 contacts. They rose from $0.25 to $4.07 as the stock rallied over the morning.

Calls have the ability to appreciate quickly because they fix the price where investors can buy a security. Their low initial cost can result in significant leverage if traders correctly anticipate a rally. Yesterday was one of those times because AMD surged 10 percent to close at a new record high of $150.16.

Advanced Micro Devices (AMD), daily chart, with 50- and 100-day moving averages and daily call volume.

The rally followed news that Meta Platforms (FB), formerly known as Facebook, will use AMD’s Epyc server chips. Microsoft (MSFT) also selected AMD’s new Milan X semiconductors in its Azure cloud-computing platform. Both represented key wins for AMD, which continues to take market share from Intel (INTC).

More Computing Power

“We believe this vision of the next 5-10 years, whether you’re talking about high-performance computing, artificial intelligence, machine learning or the Metaverse — you just need more performance,” CEO Lisa Su told CNBC. “We’re investing heavily in this thing called heterogeneous computing, the idea you have the right compute for the right workload. That’s across our entire portfolio.”

AMD also reported better-than-expected earnings, revenue and guidance on October 26.

The chipmaker traded 1.9 million options overall, its busiest session since breaking out in late July. Calls accounted for a bullish 77 percent of the total.

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