I just sold my 35 contracts of Advanced Micro Devices (AMD) Puts with a nice 1 day profit.
Yesterday I bought 35 contracts of AMD Puts. AMD has been a very hot stock so a lot of people may have thought I was nuts. Now that AMD is moving in the direction I predicted many may think I’m nuts for selling to early lol.
Take a look at my post reporting the buying of the Puts to see my reasoning. You can read it at, Bought AMD Puts.
In my post buying the Put I said I wanted to make 30¢ or 40¢ and I’d be in the position a day or 2. Well, this morning the stock opened down so I was watching closely. I bought the 35 puts for $2.29 for a total of $8015 for the 35 contract. 35 contracts represents 3500 shares. That’s a sizable position and I guess it shows the confidence I had in my prognostication. As the stock was going down I was watching closely for 2 reasons. #1 being my Long Put and #2, the 1000 shares I own to cover the 2nd leg of my Triple Play Hedge, which I’ll get into later in this post.
As the stock went down I placed a sell order on my Put. I placed the order to sell when the premium hit $2.80. I placed this order because I was also watching other positions and I didn’t want to miss out if my premium hit the $2.80. At $2.80 my profit would be 51¢. As I was watching a few positions at once AMD took a quick drop. I tried to change my order but my order at $2.80 was filled. No big deal! I love taking profit and selling at $2.80 was a very nice 1 day profit. My profit on the 35 contracts was $1785. As I write AMD is still dropping. I’m moving on to the next deal. Bringing in $1785 on a $8015 investment is a Rate of Return of 22%, a great return in 1 day. FANTASTIC!
7/17/19 – Buy to Open 35 AMD 8/16/19 $34.00 P @ $2.29 ($8015)
7/18 19 – Sell to Close 35 AMD 8/16/19 $34.00 P @ $2.80 ($9800)
Profit +$1785
As I’m writing I just heard Crammer say something on CNBC. He said “Don’t try to hit home runs because sometimes you strike out.” Even though AMD continued down after I sold my Put, I’m very happy with my profit!
For the loyal Readers
When AMD opened and moving down I made another move. For the Main Street beats Wall Street loyal readers, do you remember the Triple Play Hedge I did? Well my 1st leg expired and I was assigned on the 1000 shares I owned, exactly as I wanted! Making a $830 profit. At that time I bought another 1000 shares at $32.65 to cover the 2nd leg. Today when AMD was dropping and down to $33.10 I sold my 1000 shares that were covering my $33 2nd leg. This was a risky move because my 2nd leg was still In-the-Money. As I write the stock is down to $32.60. If the stock starts to move up I might buy the 1000 shares back to cover that Call, but for now I feel confident the stock will drop a little more. I would love to not have to buy and leave the Calls Naked until expiration, but I’ll only stay Naked if the stock goes down a little more.
7/9/19 – Buy 1000 Shares AMD @ $32.65
7/18/19 – Sell 1000 Shares AMD @ $33.10
Profit +$450
Square
FYI, after holding my Square (SQ) Puts for 4 days I sold on Tuesday for a $530 profit. Read at Sold My Square Puts. SQ started moving up with a big day yesterday. Just to show you, you must grab profit. Just a reminder, “don’t try to hit a home runs because sometimes you strike out.” Thank you Crammer for the quote! I’ll be using it often.
I think SQ moves up from here. But I’m not your investment adviser, I’m your Options Coach. lol
Netflix
As you might know, NFLX is moving down big today on a lack of subscriber growth, as reported in there Q2 earnings report. A few days ago I bought 5 NFLX Calls. I’m really not concerned with this position, at least not yet! These Calls don’t expire for another year. This is a long term position and NFLX is a great company. It will be back up to the high 300’s. Having said that, even though this is a long term position and I love the stock, a move like this calls for some risk tolerance. It is a bit of a shot to the gut!
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Steve
The Options Coach