The chip sector has been hit hard over the past two weeks, and our Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing (TSM) puts are deep in the money.
Both companies are in great shape, and both stocks are oversold are undervalued. So, we will be sticking with them, aggressively selling options to work our way back toward breakeven.
We got news today that Chinese regulators approved Advanced Micro Devices’ $35 billion acquisition of Xilinx (XLNX), which would be one of the largest deals in the semiconductor industry in history.
I am recommending we roll our puts out one week to buy time for the stocks to recover and generate more income. The spreads are wide, so you may need to work your limit orders.
If you have been assigned shares and would like guidance on selling calls, please email me at [email protected], or at my private email address if you are in the Income Masters program.
AMD Jan Week Four (1/28) 132 Put
Current Stock Price: $106.70
Cash in Hand: $4.30
- Buy to close the AMD Jan Week Four (1/28) 132 Put for around $25.45
- Sell to open the AMD Feb Week One (2/4) 132 Put for around $25.70
- Set initial credit limit at $0.25, but adjust as needed to roll today
New Cash in Hand: $4.55
TSM Jan Week Four (1/28) 140 Put
Current Stock Price: $122.02
Cash in Hand: $2.62
- Buy to close the TSM Jan Week Four (1/28) 140 Put for around $18.10
- Sell to open the TSM Feb Week One (2/4) 140 Put for around $18.15
- Set initial credit limit at $0.05, but adjust as needed to roll today
New Cash in Hand: $2.67