8/28/2021 Plan:
This week we look at Advanced Micro Devices (Ticker: AMD)
8/28/2021 Plan (continued):
- AMD – Sell the Sept 24th 99/96 put spread for 0.31
- RKT – Sell the Sept 24th 16 put for 0.24
- Prices are as of market close 8/27/2021, actual fill and strikes may differ depending on Monday’s open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
8/28/2021 Commentary:
In case you missed it, there is a chip shortage, impacting All shorts of industries. For example if you’ve gone used car shopping, you may have noticed higher prices. Part of the reason is that new cars are harder to build (lots of chips in automobiles, even more with electric vehicles). That shortage has put more demand on used vehicles. Higher demand = higher prices. Anyway, AMD has been battling INTC for a long time and this trade assumes that the recent break above the 100 level holds for the next few weeks. AMD has been moving a Lot and one thing I dislike about this trade is that the HV is a bit above the IV. HV has been coming off though, and I’m assuming it continues to do so. There has been a bit of a meme-influence on this name as well, which may provide it a bit of support.
With our RKT puts expiring last week, we look to re-open a few weeks out. Low $, high probability, and to place this trade, we need to be willing to hold on to shares for a while if assigned.
Bonus idea for those reading the commentary… I’m looking to establish a bit of Silver exposure through SLV. I plan to sell the SLV Sept 24th 21.5 put for $0.30
Feel free to Reach out with questions on this or anything else!
8/30/2021 Entry:
Sold RKT Sept 24th 16 put for 0.23. Sold AMD Sept 24th 99/96 put spreads for 0.30. May be able to get a bit more in AMD if patient. Wouldn’t go below 0.28.
9/4/2021 Update:
At the midpoint, our RKT put is worth …. wait for it…. exactly what we sold it for, 0.23. This week, we’ll plan to do nothing and we should start to see some decay if RKT doesn’t sell off
Our AMD put spreads are profitable, worth 0.22 per spread. No planned change to this trade this week – we are about $10 out of the money.
9/11/2021 Update:
The RKT puts are down 0.03 and we still have a couple weeks. I don’t plan to do anything other than wait this week and will look at potential rolls next week if we get even closer to the 16 strike.
We are down on our AMD put spreads as they are now worth 0.37. The market sold off last week bringing AMD with it. We’ll keep an eye on this trade and evaluate closing if it gets to be worth close to 0.60. The likely outcome is that I leave the trade alone for at least this week.
9/19/2021 Update:
The RKT puts are now worth 0.10 after a decline in the underlying. They expire this week. If RKT stays north of 16, I’ll let them expire worthless, if it is near 16 on Friday, I will either close for a win or consider rolling to a lower strike a few weeks out.
The AMD put spreads are roughly flat (up just a tiny bit) going into expiration. I plan to leave them on until at least Wednesday at which point closing to book a win and remove risk may be wise if the market is still a bit volatile.
9/27/2021 Close:
The AMD Put spreads expired worthless last week, bringing in an additional $120 into our accounts ($30 * 4 spreads. Adjust based on your position sizing). This was a nice win and I sold some more put spreads in AMD this week (Oct 15 99/96s to be specific). I had intended to take these off earlier, but as it kept rising throughout the week, I let them go.
The RKT puts also expired worthless, adding $23 more in profit for every put sold. I have enjoyed selling puts in the 15-17 range in RKT and will likely continue to do so.
