So has anyone investigated whether or not AMD might be at a buy point? I know there was the report on the security flaws found in their new Ryzen chipsets, but their stock has dropped since the report was released. I'm not in the know on AMD's product road map, and I haven't started any real research into AMD. I'm just wondering if it is worth my effort into starting my research.
The stock is highly manipulated right now but if you are looking for a good stock to sell short term calls on AMD is it.
My AMD positions work like this:
I usually hold anywhere from 10k to 30k AMD shares at any one point in time. Every week on monday I set limit Sell To Open orders on calls that expire the following friday. I usually set them such that AMD would have to move more than 1$ in SP within the week for me to lose profit. This monday I set a limit STO order for 12.50 March 16 expiry calls @ .30 and it filled at .46 because of all the manipulation by CTS and Viceroy research. I made $6000 premium selling 100 those 12.50 calls on my 10k current shares.
If AMD ends up spiking over 1$ and I get exercised (unlikely) then I make $10k . If AMD doesn't and just trades flat, I make the contract premium of $6k (This is about 3-6x what you normally get from doing this), which is very likely.
I hold AMD 2019 and 2020 LEAP $10 calls to capture any fast upward movement that might move me out of my long position.
This trading strategy has me at 70% 12 months returns trading AMD. In that time period AMD is down 10%. It's worked out pretty well.
I think AMD is a great buy if you are willing to hold and aren't afraid of wild price swings. Very few people seem to be able to stomach trading this stock though. Not for the faint of heart.
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