Viewer “Craig,” writes csmythe44@hotmail.com
I bet that idiot Michael Khouw is running for cover after shooting his mouth off on CNBC the other day in betting against AMD. It’s up another 5% the day after and has promised to continue. Maybe he should do his research a whole lot better next time before making a fool out of himself and angering any investor who followed his advice against AMD and already lost money because of it.
Dear Craig,
It appears from your email that you may have confused business news, that is what we are reporting, such as market color and commentary describing what we observed taking place during the trading day, and a recommendation, options trading ideas that we make on Options Action and here at www.TheOptionsEdge.com. I also assume the email you used is an alias, because my attempt to reply to you directly, bounced.
I do not currently have any positions in either AMD stock or options. I did comment, positively, on Dan Nathan’s well-timed bullish AMD recommendation on August 3rd on Options Action. You may watch that segment at this link. “How to buy the hottest chip stock this year for nothing” https://cnb.cx/2vpodWV
Yesterday, during the Options Action segment on Fast Money, I reported on the trading activity we observed in the marketplace. I do not know who was making the bullish short-term bets betting the stock would rise today, or who made the single largest trade of the day, the bearish buyer of 6,000 February 21 strike puts betting it will fall sometime in the next 6 months. You may watch that segment at this link. “AMD just hit an 11-year high, but one trader is betting it’s gone too far too fast” https://cnb.cx/2waGkjN
I’ve also provided a transcript of what I said below…
“We did see double that average options volume today. While some of the bets were making short-term bets that the stock might go a little bit higher this week, the one that really stood out to me was a purchase of 6,000 Feb 21 puts for $2.26 which was more than 10% of the stock price at the time, and those are bearish bets that the stock is going to be below that $21 stock price by the 2.26 that they paid or down about 15% in the next 6 months, and the other takeaway I think people can have, even if this trade turns out to be wrong, is that the options market is expecting this stock to move 30%, one way or the other, between now and then.”
We use this segment to highlight institutional trades and flows that viewers are unlikely to be able to see themselves with the market data available to them. Knowing which way institutional traders and investors are betting may help self-directed investors make a more informed investment and trading decisions as they do their own research. However institutional investors get it wrong sometimes too.
I have provided numerous trade ideas on Options Action over the past 10 years, we provide more detailed analysis on our trade recommendations on www.theoptionsedge.com. I have personally traded and advised on thousands more since the late 1990s, certainly I’ve been wrong many times, sometimes quite badly. Fortunately, over the years, I’ve been right more often.
If investors followed the bullish recommendation Dan made on Options Action on August 3rd I expect they’re happy they did. If investors made short-term bullish bets because institutional flows we reported Thursday, then they are likely happy about that. However, if investors, possibly including yourself, made longer-term bearish bets with a 6-month view because of the large institutional bearish bets we reported yesterday, right now they probably wish they hadn’t. Only time will tell whether that trader and those that followed him or her are right or wrong.
Thanks for watching,
Mike Khouw
