$AMD put prices rise

Bearish option traders who opened downside put positions in Advanced Micro Devices (AMD) earlier this week are making big gains today.

On Mar. 25, Market Rebellion’s Unusual Option Activity Service found that 5,500 Weekly $113 puts, expiring Mar. 28, were bought for $1.50 to $1.55 above the existing open interest of 3,278 contracts with shares at $113.64.

Those puts traded up to $7.40 today, a 383.87% return, while the stock declined 7.02% in the same time period, a large move but nowhere near that of its options on a relative basis.

Long puts lock in the price where a stock can be sold no matter how far it might drop, gaining value in a selloff with the potential for significant leverage. The contracts can be purchased either as an outright bearish bet or a hedge on a long-stock position.

AMD was last lower on the day by 3.52% to $106.31.