Advanced Micro Devices (AMD) is scheduled to announce earnings later today. Shares have run up around 17% over the past week, helped by the House’s approval of a $280 billion bill focused on domestic semiconductor manufacturing and, presumably, in anticipation of a strong earnings report.
I am recommending we roll our short call out to September and to a higher strike to capture more potential appreciation and reduce the likelihood of being called out of the position if AMD spikes after its announcement.
Also, given how far shares have moved in the past week, I am recommending we roll our protective put to a higher strike price. We will be spending some cash to do so but also increasing the odds that the put will be profitable should AMD sell off after earnings.
Note: No action is needed on the AMD Jan 2023 (1/20/23) 70 Calls at this time.
Current Stock Price: $100.24
Cost Basis: $104.83
- Buy to close 3 AMD Aug Week Two (8/12) 90 Calls for around $11.65 each ($34.95 total)
- Sell to open 3 AMD Sep Week One (9/2) 95 Call for around $9.60 each ($28.80 total)
- Set initial debit limit at $2.05 ($6.15 total), but adjust as needed to roll today
- Sell to close 3 AMD Aug Week One (8/5) 85 Puts for around $0.24 each ($0.72 total)
- Buy to open 3 AMD Aug Week One (8/5) 90 Puts for around $0.66 each ($1.98 total)
- Set initial debit limit at $0.42 ($1.26 total), but adjust as needed to roll today
New Cost Basis: $112.24