Welcome back from a long weekend! Let's have a quick look at AMD this morning after last week's OPEX on 6/16.

Nothing on this site constitutes financial advice of any kind.
All investments come with significant risks, including the loss of all capital. Please do your own research before investing, and never risk more than you are willing to lose. I hold no certifications or registrations with any financial entity.

Dealer positioning

Volland's charts have some bugs this morning, so I'll go through some of the levels as best as I can:

  • Vanna bars top out around $100M notional, so vanna is moving back into the driver's seat. Vanna is slightly positive on aggregate with the largest positive bars at $100, $130, and $145.
  • Our biggest negative nearby vanna line is at $110 at around $42M in notional value.
  • Gamma should apply some buying pressure from $121-$127, but the tallest gamma bars only touch about $10M in notional value.
  • Looking at delta, there's a large stack of short puts at $120 with long puts forming bookends at $110 and $135. The $120 level is about 3x the size of the $110 and $135 long put lines.
  • Customers seem to be mostly long calls across the board except for a large amount of short calls at $100.

Technical analysis

All of Barchart's technical indicators are pointing towards buying as of this morning:

Technical analysis indicators from Barchart
Technical analysis indicators from Barchart\

You might notice that the shorter term technical indicators, such as the 20 day moving average, are showing some weakness while we're still looking good on the longer term indicators.

Here are your important levels for the week:

Barchart trader's cheat sheet
Barchart trader's cheat sheet

Other data

AMD's implied volatility (IV) is at very low levels with an IV rank of 39%. However, it's seeing a slight uptick:

AMD IV rank from Tradytics
AMD IV rank from Tradytics

Remember, increasing IV with positive vanna creates selling pressure from dealers. At the moment, options are priced fairly evenly with a slight tilt towards a downward move:

AMD price distribution from Tradytics
AMD price distribution from Tradytics

One worrisome item is the 15 day momentum of dealer greeks buildup:

15 day momentum of dealer greeks buildup from Tradytics
15 day momentum of dealer greeks buildup from Tradytics

This a sign that customers are moving away from more bullish contracts and dealers are shorting more shares of AMD. I take this as a bearish sign in the short term. We see this bearish movement in the dealer OI as well:

Dealer OI from Tradytics
Dealer OI from Tradytics

Sure, 8/18 and 9/15 look bullish, but we might be in for a small correction between now and then. Big players in the options market don't seem to be adjusting their positions too much at the moment:

Whale positioning timeline from Tradytics
Whale positioning timeline from Tradytics

OPEX weeks can be a little wild. Last week's options flow shows both calls and puts selling off:

Net flow from Tradytics
Net flow from Tradytics

This could be profit taking on profitable trades, or it could be new short puts and calls. The delta charts from Volland show an increase in both short puts as well as that big short call line at $100.

Thesis

We are getting a lot of mixed signals from AMD right now. Long term technical indicators look great and we have bullish dealer open interest in August and September. AMD has made some great moves lately and rode the AI wave really well.

On the other hand, data points to sideways or downward moves this week and possibly longer. IV seems poised to increase which creates selling pressure with the current vanna setup.

My best guess is that we remain pinned in by $110 and $130 at the extremes. If we can get over $120 with some momentum, some movement from $121-$127 would fit the data. Any drop below $120 would likely put us between $115-$119.

Here are my interesting levels for today:

My chart levels for AMD today on a daily chart
My chart levels for AMD today on a daily chart

Good luck to all of you! Know your max loss and always remember that making no trades can sometimes be the best trade available.

Nothing on this site constitutes financial advice of any kind.
All investments come with significant risks, including the loss of all capital. Please do your own research before investing, and never risk more than you are willing to lose. I hold no certifications or registrations with any financial entity.