New Options for Advanced Micro Devices Offer Investment Opportunities

Investors in Advanced Micro Devices Inc (Symbol: AMD) observed new options trading today with expiration set for June 13th. Our YieldBoost formula has identified a put and a call contract that may be of interest for the newly listed June 13th contracts.

Put Option Insights

The put contract at the $98.00 strike price currently has a bid of $6.50. By selling to open this put contract, an investor commits to buying the stock at $98.00 while also collecting the premium. This arrangement reduces the effective cost basis for the shares to $91.50, prior to broker commissions. For those already considering buying AMD shares, this strategy may present a cost-effective alternative to purchasing at the current market price of $99.03 per share.

This $98.00 strike represents approximately a 1% discount to the current trading price. As such, there is a risk that the put contract could expire worthless. Current analytics suggest a 57% probability of this occurrence. We will monitor these odds and publish updated data on our website for this contract. If the contract expires without value, the premium could yield a 6.63% return on cash commitment, equating to a 56.30% annualized return, a metric we refer to as the YieldBoost.

Call Option Analysis

On the call side, the $100.00 strike price contract has a current bid of $6.45. Should an investor purchase AMD shares at $99.03 and subsequently sell to open this call contract as a covered call, they agree to sell the stock at $100.00. Including the premium collected, this could result in a total return of 7.49% if the stock is called away at the June 13th expiration, excluding any dividends and before commissions. However, if AMD shares rise significantly, considerable upside potential could be missed. Thus, examining AMD’s past trading history and fundamentals is essential.

Below is a chart depicting AMD’s trailing twelve-month trading history with the $100.00 strike shown in red:

Notably, the $100.00 strike represents about a 1% premium to the current trading price. There is also a chance that this covered call could expire worthless. If that happens, the investor retains both their shares and the collected premium. Current analytical data shows a 48% probability of this happening. We will be tracking these odds over time on our website. Should the covered call expire without value, the premium would increase the investor’s return by 6.51%, translating to a 55.29% annualized return, also referred to as the YieldBoost.

Volatility Insights

For the put contract, implied volatility stands at 55%, while the call contract has a 53% implied volatility. In comparison, the actual trailing twelve-month volatility, calculated from the last 250 trading days and the current stock price of $99.03, is estimated at 52%. For additional ideas on put and call options, please explore further options.

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Also see:

• Market Cap History
• GIX YTD Return
• GGZ market cap history

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.