detective work seems to pay well these days
nice trading mate
Huge volume on AMD Dec25 puts
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detective work seems to pay well these days
nice trading mate
Was the source of those trades going long or short? What's their stock position? Uh...we don't know, do we?
Buying options because of an increase in open interest is one of the worst trades you could possibly make, in my humble opinion. The volume is very likely one leg of a more complex trade that has absolutely nothing to do with a big bear call on AMD.
There are a thousand different possible reasons for the trades that increased the oi and buying puts just because of the increase in oi is an awful, unwise trade.
Buying options because of an increase in open interest is one of the worst trades you could possibly make, in my humble opinion. The volume is very likely one leg of a more complex trade that has absolutely nothing to do with a big bear call on AMD.
There are a thousand different possible reasons for the trades that increased the oi and buying puts just because of the increase in oi is an awful, unwise trade.
I didn't buy AMD puts because of the huge increase in volume. I only noticed the huge increase in volume AFTER I bought the puts, when the open interest was only 4,800.
I will be holding until expiration.
I just posted this thread on ET. I see they have AMD on the sell list and its true value is less than $20.00. The article is from TheStreet.com and came out today.
that is an interesting list and the author I think quite astute from what I've read before (his articles). Curious though...why hold until exp? Do you generally have a profit target that might be different than if you were buying a call? I'm not as well versed in buying puts but have assumed you would hold them perhaps a shorter time than a long call. thanks and good luck. donna
I sold my Nov AAPL calls too early (bought aapl calls at .80, dropped to .40, went to 1.60 and I sold, expired at $5.00+), so I decided my next move will be held to expiration.
I only have ten contracts of AMD Dec 25 Puts @ 0.40. Risk is $435.00 including commission. Time decay is taking its toll on these options.
All I can say is "wow"
What an expensive way to learn.
and speaking of learning, you folks might want to "learn" to think critically about this situation.
In general, change in open interest BY ITSELF isn't a good indicator. IF HOWEVER you look at WHEN the change occurs (the context) you can develop the rest of the story. Traders make moves because they learn something. Just prior to that change in OI, what happened in the market that would affect AMD?
You might have anticipated that vol would get crushed based on the history of the stock. It has happened before.
Putting 2 and 2 together is the way you keep from holding a position and "hoping" it will move in your direction by expiry.
By the way, looking at the bigger picture, you can see who it is that benefits from the situation. It is (sharp) traders and MM's who benefit from vol crush. They are the ones who anticipate it and know how to act on it. In general the company insiders dont know the options market and are looking for a different way to cash in (simply buying and/or selling ATM or ITM). Look at WHERE the interest changed relative to the price. In a low vol market you have to learn how to trade news, or you will just bleed to death.
Finally, it would be advisable to do this while out of the market. It costs less to do your homework, and then trade it.
Good luck newbies
Steve
What an expensive way to learn.
and speaking of learning, you folks might want to "learn" to think critically about this situation.
In general, change in open interest BY ITSELF isn't a good indicator. IF HOWEVER you look at WHEN the change occurs (the context) you can develop the rest of the story. Traders make moves because they learn something. Just prior to that change in OI, what happened in the market that would affect AMD?
You might have anticipated that vol would get crushed based on the history of the stock. It has happened before.
Putting 2 and 2 together is the way you keep from holding a position and "hoping" it will move in your direction by expiry.
By the way, looking at the bigger picture, you can see who it is that benefits from the situation. It is (sharp) traders and MM's who benefit from vol crush. They are the ones who anticipate it and know how to act on it. In general the company insiders dont know the options market and are looking for a different way to cash in (simply buying and/or selling ATM or ITM). Look at WHERE the interest changed relative to the price. In a low vol market you have to learn how to trade news, or you will just bleed to death.
Finally, it would be advisable to do this while out of the market. It costs less to do your homework, and then trade it.
Good luck newbies
Steve
Your post makes no sense at all. What is the "big picture" for AMD? Could you be more clear?
Morgan Stanley ...
Elsewhere in the sector, the research firm reiterated "equal-weight" ratings on Intel (nasdaq: INTC - news - people ), Xilinx (nasdaq: XLNX - news - people ) and National Semiconductor (nyse: NSM - news - people ). It maintained an "overweight" rating on Advanced Micro Devices (nyse: AMD - news - people ).
Elsewhere in the sector, the research firm reiterated "equal-weight" ratings on Intel (nasdaq: INTC - news - people ), Xilinx (nasdaq: XLNX - news - people ) and National Semiconductor (nyse: NSM - news - people ). It maintained an "overweight" rating on Advanced Micro Devices (nyse: AMD - news - people ).