Given the possibility of a sell-off following the conclusion of the Federal Reserve meeting this afternoon, I am recommending we buy protective puts on Advanced Micro Devices (AMD), Taiwan Semiconductor Manufacturing (TSM) and Walgreens Boots Alliance (WBA).
Note that these puts are being purchased as hedges. Ideally, the market will go up and they will expire worthless. However, in the event that the market sells off sharply, the purchased puts could explode in value. If that happens, we will look to pocket profits to help offset our net debit/cost basis on the positions and/or roll to lower strikes to keep our hedges in place.
AMD Jun Monthly (6/17) 100 Put
Current Stock Price: $87.95
Net Debit: $17.84
Action: Buy to open the AMD Jun Monthly (6/17) 82.50 Put around $0.72, but adjust as needed to buy a put today
New Net Debit: $18.56
TSM Jun Monthly (6/17) 93 Call
Current Stock Price: $88.08
Cost Basis: $123.73
Action: Buy to open the TSM Jun Monthly (6/17) 85 Put around $0.56, but adjust as needed to buy a put today
New Cost Basis: $124.29
WBA Jun Monthly (6/17) 43 Call
Current Stock Price: $40.43
Cost Basis: $46.96
Action: Buy to open the WBA Jun Monthly (6/17) 40 Put around $0.44, but adjust as needed to buy a put today
New Cost Basis: $47.40