I am recommending we roll the short legs of our Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing (TSM) recovery positions out to generate more income. I then want to use that cash to help purchase protective puts to hedge against a potential sell-off following today’s Federal Reserve announcement.
Since Advanced Micro Devices is scheduled to report earnings on Aug. 2, I am going out another week with the AMD purchased put to hedge against that event as well.
AMD Jan 2023 (1/20/23) 70/Jul Week Five (7/29) 90 Call Spread
Note: No action is needed on the AMD Jan 2023 (1/20/23) 70 Calls at this time.
Current Stock Price: $88.39
Cost Basis: $105.58
Action:
- Buy to close 3 AMD Jul Week Five (7/29) 90 Calls for around $1.05 each ($3.15 total)
- Sell to open 3 AMD Aug Week Two (8/12) 90 Calls for around $3.75 each ($11.25 total)
- Set initial credit limit at $2.70 each ($8.10 total), but adjust as needed to roll today
- Buy to open 3 AMD Aug Week One (8/5) 85 Puts for around $2.45 each ($7.35 total)
New Cost Basis: $104.83
TSM Jan 2023 (1/20/23) 70/Jul Week Five (7/29) 88 Call Spread
Note: No action is needed on the TSM Jan 2023 (1/20/23) 70 Calls at this time.
Current Stock Price: $86.12
Cost Basis: $118.47
Action:
- Buy to close 4 TSM Jul Week Five (7/29) 88 Calls for around $0.40 each ($1.60 total)
- Sell to open 4 TSM Aug Week One (8/5) 88 Calls for around $1 each ($4 total)
- Set initial credit limit at $0.60 each ($2.40 total), but adjust as needed to roll today
- Buy to open 4 TSM Jul Week Five (7/29) 85 Puts for around $0.71 each ($2.84 total)
New Cost Basis: $118.91