In the aftermath of

Tuesday's nightmarishly volatile action in the


, options players were taking an overall cautious stance on the market Wednesday.

Options activity in the

Nasdaq 100 unit trust

(QQQ) - Get Report

, while relatively active, was more skewed toward the hedging side than speculation. The options speculators have had about as much volatility as they could handle and after Tuesday's wild swing, even their mettle is being tested.

"A lot of people are taking a wait-and-see attitude," said Jordan Kahn of

Kahn Asset Management


Kahn said his best bet of what's going on is that people who got wiped out in the market's recent action can't get back into the market, while those who have money they can put to work are treading lightly.

Kahn pointed out that the activity in the QQQ Wednesday has been in front-month (April) and at-the-money options, which indicates that people are probably using those options as a hedge rather than to speculate.

That's not to say, however, that people weren't hoping for more upside.

Kahn pointed out that there was a notable amount of action in QQQ April 100 calls as the QQQ rose 1/16 to 102. By early this afternoon, 4,337 call option contracts traded, compared to open interest of 2,997.

There are probably some out there gearing up for a bounce back, he said, noting the April 100 call action. The QQQ April 100 calls were lately at 7 ($700 per contract), up 1/2 ($50).

Looking Like a Genius on AMD

Those big buyers of

Advanced Micro Devices

(AMD) - Get Report

calls Tuesday in the options market have got to be feeling like heroes Wednesday.

Early this afternoon, shares of AMD were up 6 1/16 to 67 3/16.

On Tuesday, Advanced Micro call options were on fire. According to

McMillan Analysis

, 22,736 call option contracts traded, while only 3,790 puts traded. McMillan noted that the average volume on AMD is 12,169 contracts.

Much of that action came in the April 55, 60 and 65 calls, which traded a combined 10,000 contracts. Those same options had their prices run with today's rally. The April 55s were up 4 3/4 ($475) to 13 3/8 ($1,337.50); April 60s were up 3 5/8 ($362.50); and the 65s popped 2 1/2 ($250) to 6 5/8 ($662.50).

AMD announced Wednesday it expects to report record sales of more than $1 billion in the quarter ended Sunday. Not only that,

Merrill Lynch's

chip analyst Joe Osha upgraded his intermediate-term rating to accumulate from neutral and his long-term rating to buy from neutral.

Osha topped it off with a 12- to 18-month price target on the stock of 120.

AMD's stock has been on a run lately. On March 17, AMD closed at 50.