New Trading Opportunities Arise for AMD Investors
Exploring December Options: Insights and Strategies
Investors in Advanced Micro Devices Inc (Symbol: AMD) have new options available today, set to expire on December 6th. At Stock Options Channel, our YieldBoost formula has examined the AMD options chain and pinpointed one put and one call contract that may pique investor interest.
The put contract at the $150.00 strike price currently has a bid of $7.95. If an investor sells to open this put, they agree to buy the stock at $150.00 while also collecting the premium, resulting in an effective cost basis of $142.05 (before brokerage fees). For those looking to add AMD shares, this option offers a potential alternative to buying at today’s market price of $153.99 per share.
This $150.00 strike price represents an approximate 3% discount from the current trading price, meaning it sits out of the money by that percentage. Analysts indicate a 61% chance that the put contract could expire worthless. Stock Options Channel will monitor these odds over time and will display changes on our website under the contract detail page. Should the contract expire worthless, the premium would yield a 5.30% return on the cash commitment, equating to an annualized yield of 44.94%, which we term the YieldBoost.
Below is a chart illustrating the trailing twelve months of trading activity for Advanced Micro Devices Inc, with the $150.00 strike shown in green:
On the options call side, a call contract at the $155.00 strike price is currently bid at $10.20. If an investor buys AMD shares at the current price of $153.99 and sells to open this call as a “covered call,” they commit to sell shares at $155.00. Adding the premium collected, this creates a potential return of 7.28% if the stock is called away by the December 6th expiration (excluding any dividends and brokerage fees). However, significant upside might remain if AMD shares appreciate notably, highlighting the importance of reviewing both the recent trading history and the company’s fundamentals. Below is a chart capturing AMD’s trading history over the last twelve months, with the $155.00 strike highlighted in red:
The $155.00 strike price represents a slight premium of about 1% over the current trading price, indicating it is also out of the money. Should the covered call contract expire worthless, the investor retains both their shares and the premium collected. Current analytical data suggests a 46% probability of this occurring. Stock Options Channel will track these odds over time and provide a chart of the trading history for the option contract on our website. If the contract expires worthless, the premium would add an extra 6.62% return for the investor, inflated to 56.17% on an annualized basis — another instance of YieldBoost.
For the put contract, the implied volatility stands at 51%, while for the call, it is 49%. In contrast, our analysis of the actual trailing twelve-month volatility, based on the last 251 trading days and today’s price of $153.99, is determined to be 48%. Interested in more options contract ideas? Visit StockOptionsChannel.com for additional insights.
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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
