Friday’s Vital Data: Advanced Micro Devices, Inc. (AMD), General Electric Company (GE) and Netflix, Inc. (NFLX)

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U.S. stock futures are headed broadly lower this morning, as Wall Street digests the threat of a North Korean hydrogen bomb test over the Pacific Ocean. Geopolitical tensions escalated sharply with the North this week after President Donald Trump’s inflammatory speech at the U.N. where he threatened to “totally destroy” North Korea if Pyongyang provoked the U.S. or its allies.

Friday’s Vital Data: Advanced Micro Devices, Inc. (AMD), General Electric Company (GE) and Netflix, Inc. (NFLX)Against this backdrop, futures on the Dow Jones Industrial Average are down 0.14%, S&P 500 futures are off 0.2% and Nasdaq-100 futures have slipped 0.34%.

In the options pits, traders ghosted to the sidelines amid a rising preference for safer investment assets. Overall, only about 12.3 million calls and 11.3 million puts changed hands on Thursday. On the CBOE, the single-session equity put/call volume ratio jumped to 0.66, driving the 10-day moving average to a one-month high of 0.63.

Taking a closer look at Thursday’s volume, Advanced Micro Devices, Inc. (NASDAQ:AMD) saw massive swings in volatility yesterday following rumors the company had partnered up with Tesla Inc (NASDAQ:TSLA). Elsewhere, General Electric Company (NYSE:GE) sparked call option interest after ending decades old executive perk in order to save money, and Netflix, Inc. (NASDAQ:NFLX) drew added option activity following a report on children’s TV watching habits.

Friday’s Vital Options Data: Advanced Micro Devices, Inc. (AMD), General Electric Company (GE) and Netflix, Inc. (NFLX)

Advanced Micro Devices, Inc. (AMD)

AMD stock surged more than 5% early on Thursday following rumors the company had signed a deal with Tesla to design an AI chip for self-driving cars. However, the rumor was quickly dispelled by GlobalFoundaries, which fabricates chips for AMD. “Tesla has not committed to working with us on any autonomous driving technology or product,” a spokesperson for GlobalFoundaries said.

AMD stock quickly gave up early gains and more, ending the day down 2.4%. Options traders had already pulled the trigger on bullish speculation, however. Volume surged to more than 480,000 contracts, more than tripling the stock’s daily average. Furthermore, calls made up 72% of the day’s take.

The net effect of the added call volume pushed AMD’s October put/call open interest ratio down from Tuesday’s reading of 0.74 to today’s perch at 0.72, with traders heavily favoring out-of-the-money calls. This sentiment could reverse sharply heading into the weekend, however, as AMD stock is down another 2% in premarket trading this morning, and it’s testing support at its 50-day moving average.

General Electric Company (GE)

New CEO John Flannery isn’t messing around. Flannery has moved quickly to cut spending at struggling GE, and his latest move ends a decades-old executive perk, grounding the company’s fleet of private jets. What’s more, Flannery plans on eventually selling the fleet as part of his move to cut debt and spending — a plan that includes reducing staff and delaying construction of its new headquarters in Boston.

GE stock rose nearly 2% on the news, and options traders piled into calls as a result. Volume more than doubled GE’s daily average at 206,000 contracts, while calls made up a sizeable 78% of the day’s take. That said, while GE has seen a bit of a resurgence in optimism lately, near-term traders remain wary.

For instance, the October put/call OI ratio remains elevated at 0.84, as puts remain a staple for many GE speculators. The $23 strike, in particular, is home to nearly 50,000 contracts, as traders look for GE stock to fall further over the next month.

Netflix, Inc. (NFLX)

A recent report from Bernstein added another feather to Netflix’s hat this week. According to the report, the average viewership of children’s networks has fallen 50% in the past six years, “and it’s still declining at high-teens rates.” While the report didn’t specifically implicate Netflix as the cause for the decline, it does open up another massive market from which the company can profit and solidify its lead with future generations.

NFLX traders took the news well, sending the stock nearly 2% higher yesterday. Furthermore, options traders emerged from the woodwork to gobble up calls — non-typical behavior for this usually bearish group. Volume rose to 143,000 contracts, nearly doubling NFLX’s daily average, while calls made up 62% of all activity.

But NFLX remains in the doghouse for most options traders, especially short-term speculators. Currently, the October put/call OI ratio rests at a bearish reading of 1.20, with puts easily outnumbering calls among front-month options.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2017/09/friday-vital-data-advanced-micro-devices-inc-amd-general-electric-company-ge-netflix-inc-nflx/.

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