Options Traders Circle Chip Stock Before Earnings

Big Tech earnings are well underway, with Microsoft (MSFT) reporting just last week, and plenty more coming up this week. Chip leader Advanced Micro Devices Inc (NASDAQ:AMD) is slated for the confessional after the close on Thursday, Feb. 12, and is seeing ample attention in the options pits ahead of the event. 

AMD easily made the list of  Senior Quantitative Analyst Rocky White's equities that have attracted the highest options volume in the past two weeks. In the last 10 days, the stock has seen more than 3.9 million calls and 3 million puts change hands. The weekly 1/30 220-strike put saw a majority of this action, with the weekly 1/23 265-strike call following closely behind.

Historically, AMD tends to underperform after earnings, finishing lower after five of its past eight reports, including a 6.4% drop in August. During the past two years, the shares have averaged a swing of 5.4%, regardless of direction, with options traders pricing in a much larger-than-usual 11.3% swing this time around.

Advanced Micro Devices stock has seen some choppy price action since its Oct. 6 bull gap of 23.7%. However, the shares remains above the key $200 area, a level of support over the past three months. Year-over-year, the equity has added 114%, up 4.1% at $246.48 at last glance. 

Even further, the stock's Schaeffer's Volatility Scorecard (SVS) comes in at 94 (out of 100). In simpler terms, this indicates AMD has consistently realized higher volatility than its options have priced in.