Advanced Micro Devices (AMD) is on the move today. Instinet raises Price target to $37 from $33.
Instinet is an institutional, agency-model broker that also serves as the independent equity trading arm of its parent, Nomura Group. It executes trades for asset management firms, hedge funds, insurance companies, mutual funds and pension funds.
I have 1000 shares of AMD at $32 which covers the 1st leg of my “Triple Play Hedge.” The 1st leg is a $32.50 Call expiring this Friday. It’s early but right now it looks like I’ll get assigned on these shares at $32.50. Since I plan on getting assigned on these shares I just bought another 1000 shares to cover the 2nd leg of my “Triple Play Hedge.”
If I do get assigned on my 1st 1000 shares I’ll make $500 on the stock sale and keep the $500 premium. This will give me a $1000 profit on the 1st leg of my “Triple Play Hedge.”
So far my strategy is working nicely! It especially works well when the stock moves nice and slow so I can make adjustment trades easy. Buying these 1000 shares I consider an adjustment trade.
Let’s watch and see how my strategy works out in the end. We have a lot of time left.
Steve
The Options Coach