Investors in Advanced Micro Devices Inc (AMD) saw new options trading begin today for the August 12 expiration. Notably, a put contract at the $445.00 strike has a current bid of $25.55, allowing investors to secure a cost basis of $419.45 if executed, representing a 1% discount to the current share price of $448.44. The probability of this put contract expiring worthless is estimated at 57%, potentially providing a 5.74% return on the cash commitment—equating to an annualized return of 139.71%.
On the call side, a $460.00 strike price call contract is bidding at $27.40. Should investors buy shares at $448.44 and sell this covered call, they could see an 8.69% total return if the stock is called away. The possibility of the call contract expiring worthless is estimated at 50%, offering a 6.11% additional return on investment, or an annualized rate of 148.68%. Implied volatility for the put is at 87%, while for the call it stands at 94%.
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