Tech stocks have gone into full meltdown mode in the past week. That’s created some huge bargains as many names have given up year-to-date gains… or even further back. One trader sees a rebound in shares of Advance Micro Devices (AMD) by May.
The activity is in the $92.50 calls. Over 7,500 contracts traded recently, a 45-fold jump in volume from the prior open interest near 166. The buyer paid about $2.20 to make the trade on average.
The $92.50 strike would put shares near its all-time high of $99 per share by the time the trade expired in just over two months. With shares diving under $80, shares would need to rally about 19 percent for the trade to move in-the-money.
- Man Who Predicted 2008 Crash: “The Mother of All Crashes is Coming”
If you've watched the movie The Big Short,you've heard of Michael Burry. He was one of the few who no only predicated the 2008 crash but profited from it.
He made $750 million for his investors and $100 million personally when his bet against the housing market paid off. His next big prediction?
He's warning the "mother of all crashes" is coming.
If you have any money in the markets, I urge you to click here and get the exact day of the next stock market crash.
Action to take: Market selloffs of this magnitude are rare, and AMD is in a great spot operationally. The chipmakers are dealing with shortages, and the company’s outlook for the coming year looks great.
Chances are the meltdown, at least for the chipmakers, has little to do with those fundamentals. The market’s sharp moves higher off of daily lows on Thursday and Friday suggest the end may be near.
Traders should look at the trade, with the prospect of buying multiple contracts. That way they can scale out of the trade, potentially starting to take profits within a week or two on a strong rebound.