I am recommending we roll our protective puts on Advanced Micro Devices (AMD) to a lower strike price while keeping the expiration date the same. This allows us to keep our hedge in place while taking some profits off the table. The profit we book will reduce our cost basis on the position.
Note: No action is needed on the AMD Jan 2023 (1/20/23) 70/Sep Week Five (9/30) 82 Call Spread at this time.
Current Stock Price: $70.72
Cost Basis: $106.48
- Sell to close 3 AMD Sep Week Four (9/23) 70 Puts for around $0.78 each ($2.34 total)
- Buy to open 3 AMD Sep Week Four (9/23) 68 Puts for around $0.27 each ($0.81 total)
- Set initial credit limit at $0.51 ($1.53 total), but adjust as needed to roll today
New Cost Basis: $104.95