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JP Morgan recommends betting on AMD for a short-term pop from cryptocurrency conference hype

  • J.P. Morgan is bullish on AMD shares due to the blockchain conferences in New York this week.
  • "We like the reward-risk of owning upside in AMD given its historical returns following the [cryptocurrency] summit, cheap implied volatility and high short interest, which could add a short-squeeze component to the trade," the firm's equity derivatives strategist writes.
  • CoinDesk's Consensus three-day conference starts Monday. The conference is now the centerpiece of a full-blown "Blockchain Week NYC," an event run in partnership with the New York Economic Development Corporation.
A 200-millimetre wafer of Advanced Micro Devices (AMD).
Norbert Millauer | AFP | Getty Images
A 200-millimetre wafer of Advanced Micro Devices (AMD).

The digital currency conferences this week in New York City present an attractive trading opportunity in AMD, according to J.P. Morgan.

"Over the last three years, AMD has staged significant rallies following the blockchain technology summit, Consensus," J.P. Morgan equity derivatives strategist Shawn Quigg wrote in a note to clients Monday. "We like the reward-risk of owning upside in AMD given its historical returns following the summit, cheap implied volatility and high short interest, which could add a short-squeeze component to the trade."

CoinDesk's Consensus three-day conference started Monday. The conference is now the centerpiece of a full-blown "Blockchain Week NYC," an event run in partnership with the New York Economic Development Corporation.

Quigg said AMD shares rose about 15 percent on average over the last three years during the month after the conference.

As a result, the strategist recommended buying the AMD June $13 strike call option.

A call option gives an investor the right to buy a stock at a certain price during a particular time period. It rises in value as the underlying security's price goes higher.

Cryptocurrency miners use graphics cards based on AMD's and Nvidia's chips to "mine" new coins, which can then be sold or held for future appreciation.

Options trading is typically for sophisticated investors and not for the faint of heart.

AMD shares rose 2.3 percent Monday after the report.