JJ Kinahan Discusses Options Activity In GE, Google, AMD & More

On Thursday, Benzinga spoke with TD Ameritrade Chief Strategist JJ Kinahan about options activity in a few stocks ahead of earnings.

The expert first went into General Electric Company GE. Overall, he says, the stock is missing a catalyst, especially after the last quarter. “The market is looking at about a 2 percent move on GE, which, while nice, is not anything” to go crazy about, he added.

Kinahan thinks one of the things investors should be looking at on Friday’s call is how the company is going to restructure its operations, as they scale back GE Capital, GE Capital Real Estate, etc.

Regarding the semiconductor space, following Intel Corporation INTC’s beat and Micron Technology, Inc. MU’s upgrade, Kinahan told Benzinga that sentiment is pretty positive. Only two quarters ago, investors were looking at negative metrics all around, especially among old-school chipmakers.

Now, the general consensus on chipmakers should be turning to the positive field. That being said, however, the expert highlights that investors should still be careful, even in spite of the expectations for “a nice surprise.”

At Advanced Micro Devices, Inc. AMD, the strategist saw some buyers of the two calls and the two puts ahead of the earnings call. The calls and puts, which expire tomorrow, saw plenty of action, he assured, adding that this makes sense, since “there’s nowhere else to go, so to speak. It’s such a small stock at $2 that, the thing to get excited about, if you wanted to, is that they’re pricing in about a 10 percent move; again, keeping scale in mind.”

“In terms of the implied volatility –he continues, AMD hit their 77 percent high of implied volatility for the year.” However, investors should be careful about calls, since this is a $2 stock.

Google Inc GOOGL GOOG just reported earnings. Prior to the report, the company did not see a lot of options activity, although TD Ameritrade saw some buyers on the $595 and $600 calls in the morning. However, these look quite expensive, the strategist supplements, as they are pricing in about 3.5 percent move.