Options Traders Bet on Intel and AMD After Fed Hike
Aggressive call buying in semiconductor stocks signals confidence in AI hardware demand despite recent monetary tightening.
Options traders positioned for upside in AI chipmakers following the Federal Reserve’s first rate hike since 2023. Intel and Advanced Micro Devices led a surge in bullish activity as equity markets reversed their initial volatility reaction to the monetary policy shift.
The Fed raised its benchmark rate by a quarter percentage point to a target range of 3.75% to 4.00%. While this decision initially spiked volatility, the S&P 500 advanced over 1% in the following session. The Cboe Volatility Index dropped more than two points to settle at 15.4, reflecting reduced hedging demand.
Intel dominates options volume
Intel recorded the heaviest trading activity, with options volume exceeding 1.3 million contracts. This figure was nearly triple the stock’s 30-day average, according to data cited by CNBC. Total premium initiated reached approximately $320 million, with $231 million allocated specifically to call contracts.
The company’s shares have climbed 35% from their summer low, reaching their highest levels since July. This recovery aligns with the aggressive options positioning observed in the market, indicating strong conviction in the firm’s near-term performance.
AMD spreads require price breakout
Advanced Micro Devices also saw elevated trading, with volume running nearly double its average. Traders purchased roughly 107,000 calls against 71,500 puts, based on Cboe LiveVol data. A notable trade involved buying 1,500 November 20 calls at a 550-strike for $8.3 million.
Simultaneously, the trader sold an equal number of June 2027 calls at a 750-strike for the same amount. This structure requires AMD’s stock price to exceed $615 before the November expiration date to generate a positive return. The trade underscores a specific threshold for profitability in the semiconductor sector.
Market structure favors gain exposure
Broader market structure indicated a preference for upside potential over downside protection. At-the-money call options commanded a two-dollar premium over comparable put options. According to CNBC, this gap signals strong investor appetite for capital gains rather than hedging.
Other names like CrowdStrike and SpaceX also saw above-average volume, though SpaceX activity was skewed toward puts, largely driven by large sellers of downside protection. The overall trend in tech stocks, as highlighted by GN auto stocks/technology: tech stocks, remains centered on high-growth AI infrastructure plays.
