A few minutes ago I did a Buy/Write with Advanced Micro Devices (AMD). The chip stocks are very hot today, plus there in talk in the news that the U.S./China trade talks are making progress. A trade dead will definitely help the chip stocks.
I bought 800 shares of AMD and sold an 8 contract Call. I sold the AMD 4/5/19 $29.50 Calls for a 60¢ premium, that’s $480 on the 8 contracts. This is an At-the-Money Call that will expire in 3 days, this Friday. This trade is a Covered Call on a hot stock and a hot sector. This trade gets a Risk Factor 1.
Buy 800 Shares AMD @ $29.50
Sell to Open 8 AMD 4/5/19 $29.50 C @ 60¢ (+$480)
This is an At-the-Money Trade. I bought at $29.50 and I sold the $29.50 Call. I’m only looking for the premium. I hope the stock stays above the Strike Price of $29.50 and I get assigned. If the stock pulls back and I don’t get assigned, I keep the stock and keep the $480 premium.
Let’s see what happens!
Steve
The Options Coach