AMD Momentum Run, Velocity Run, Profit-taking

AMD has run with momentum driven by pro traders’ activity. The Pros will often be the initial driving force behind a Velocity run (see rectangle around the velocity run.) A velocity run is different from a momentum run as the candles do not overlap. One thing for options traders to remember is that when pro traders are swinging a giant lot trade for a short-term profit, they will often buy Option Puts as an insurance policy against the risk. So rising Option Puts doesn’t mean that the “options market thinks this stock will go down.” Rather, a surge of options puts with a velocity run is indicative of pro traders.

Currently the stock is under heavy large-lot profit-taking. Smaller funds are buying too late in the run.