I just did a Buy-Write with Advanced Micro Devices (AMD).
AMD is on a run up today in a down market. I took a little deeper look and notice a lot of option activity. The stock is pretty low and the RSI is nowhere near in a overbought situation. I feel the stock will go higher from here but I’m really not into owning the stock right now. Since I feel strongly that the stock will move up and I feel even stronger that the stock will not be moving down, I decided to do an At-the-Money Buy-Write. I bought 1000 shares of the stock at $30.95 and sold 10 contracts of the $31 Calls. This position will expire this Friday and I received a premium of 60¢. That’s just under 2%. I entered this trade wanting to get assigned. I hope the stock goes up, I get assigned, keep the $600 premium, and move on. This trade is a Covered Call on a very good stock. It gets a Risk Factor 1.
Advanced Micro Devices – Buy-Write
Buy 1000 Shares AMD @ $30.95
Sell to Open 10 AMD 9/20/19 $31.00 C @ 60¢ (+$600)
If I get assigned it will be a great 5 day trade. Exactly the type of trade I like. My only problem is maybe 20 contracts would have been better!
Steve
The Options Coach