Advanced Micro Devices, Inc. (NASDAQ:AMD) has seen decent bullish options flow over the last two days. Yesterday, Tuesday, October 12, we saw orders with premiums ranging from $12k to $90k on options orders designated as bullish by the Unusual Whales Flow tool.
Although the volume of these orders isn’t particularly impressive, the consistent ask-side call flow could indicate that traders felt AMD was due for upward movement. This sentiment potentially lies with AMD’s upcoming developments in the computing space. Indeed, this morning, Wednesday October 13, 2021, AMD released an announcement of their new budget AMD Radeon RX 6600.
Following this announcement, the flow tells a much more bullish story, as AMD makes another push toward $110 a share.
This morning’s flow is dominated by bullish activity. Most orders lie within that same premium range mentioned for yesterday, however one order really stands out; a $2.1 million in premium spent on the $125 call strike for September 16, 2022. This is a massive order, and doesn’t appear to be tied to a multi-leg strategy per the Flow tool’s indicators (multi-leg orders are designated by the “⇅” symbol to the left of the ticker, as seen next to the $80 call buy with a November 11th expiration).
The overall volume of options flow for AMD is also gearing up to an impressive level. In the image above, we can see that the highest call volume AMD has seen in recent days occurred on Thursday, September 30th, with a total call volume of 416,853. Then, on Thursday, October 7th, we saw above-average volume again at 386,810 call contracts traded.
This morning, AMD call option volume is already sitting above the levels seen in more recent days, at 294,804 call contracts. Given the fact that, at the time of writing, we are under two hours into the trading day, one can expect that this volume could increase significantly throughout the day.
So, why are AMD investors so bullish for this announcement? The new RX 6600 (priced at $329) offers a lower-cost option for computer enthusiasts, while maintaining solid performance. For example, the new graphics card averages 100 frames per second on the company’s test suite, compared to the previously released, higher grade and cost card, 6600 XT, which averages 120 frames. Not only this, but AMD has developed the architecture of this card to be cross platform in ways we’ve not seen before. According to the company’s press release, it is the only gaming architecture that spans from Desktop and laptops to mobile devices, consoles, and automotive infotainment systems.
In our current world, where GPU hardware is through the roof expensive (NVIDIA and AMD cards both reaching levels as high as 83% over MSRP) an affordable card with high performance is highly coveted. Although, in all likelihood, one may have already run into the issue of sourcing one of these new budget cards.