Looking at a possible options combination on $AMD as part of the crypto currency play tied in with their processing chip partnership expected profits. If you would like get more information on trading ideas in crypto to Stocks to options feel free to join the discussion http://www.ascendtrading.net?aff=osirustwits
Here are the trade ideas
AMD LONG CALL has an average move 12% during earnings with current price at time of report $11.79 means buying the $11 strike could net you a 25% move profit.
An AMD BULL CALL SPREAD buying the $11 for $1.73 and selling either the $13 strike for $0.83 or $14 strike for $0.55 gets you into this trade for $0.90 and $1.18 respectfully. Keeping in mind that you are currently $0.79 in the money that means only buying $0.11 and $0.39 of extrinsic value to have a profit potential of a $2 or $3 spread. I like those odds on the reduced capital as you have long the 66 Delta.
AMD COVERED CALL Buying shares of AMD at $11.79 and selling the $12.00 call for $1.22 would result in a call-away-return of 11.9% if the stock trades above the strike following earnings. This also would provides downside protection to $10.58 and positive Theta
SHORT STRANGLE expecting the move to not go past the 12% avg means that we could throw an other trade over top and short strangle selling the $14 Call strike and the $10 Put Strike for a total of $1.08 meaning break even would be $15.08 tot he upside and $8.92 to the downside.
LIZARD also could be thrown on top of the bull call spread by selling short the $13 call for $0.83 and sell the $11 put for $0.86 then to reduce the infinite upside risk buying the $14 strike call for $0.57 put the LIZARD in play for a credit of $1.12.
Why I like the combo of the BULL CALL SPREAD and the LIZARD is:
If AMD goes down after EARNINGS the break even on the BCS is $11.90 so you would loose under that and the break even on the LIZARD would be $9.88 so $10.89 would roughly wash both trades as no gain or loss..
If AMD goes up as I expect since I have capped the upside risk by taking in more than the spread $1.12 vs $1 (-$13C +$14C) I would still make $0.12 profit on the LIZARD while I would make full spread on the BCS ~$1.10 profit totalling $1.22 but anything less than full spread would keep the full $1.12 from the LIZARD
Best Scenario AMD is pegged at $12.99 at option expiry from the BCS I would get full value of the $11 call being $1.99 in the money no value on the short call and thus also keep full value on the LIZARD for a profit of $3.11 you can see why I like the combo of the BCS + LIZARD in this case.
This is strictly for infotainment any trade I post is how I am trading my money if you follow you do so at your own risk. Everything has risk even crossing the street so look both ways, do your due diligence.
