When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Tech Alert - Advanced Micro Devices, Inc. (AMD) – BUY
Buy Advanced Micro Devices, Inc. (AMD) June 2024 $152.50-$157.50 in-the-money vertical BULL CALL spread at $4.20
Opening Trade
6-7-2024
expiration date: June 21, 2024
Portfolio weighting: 10%
Number of Contracts = 24 contracts
I’ve wanted to execute a trade in chip maker AMD for quite some time and readers should even look long-term at this tech gem.
AMD is another chip company at the heart of generative AI infrastructure and I am inclined to execute a short-term bullish trade of 14 days.
This is a bet in the next 14 days that AMD won’t drop lower than $157.50.
There is ample demand for AI chips and playing this through one of the names like Micron or Nvidia is something that would make sense.
I am going with AMD in the short term and as we exit earnings season, I believe we should hear many positive things about the revenue estimates for AI chips in 2024.
At worst, these stocks are solid buy-the-dip candidates.
Don’t pay more than $4.35.
Here are the specific trades you need to execute this position:
Buy to Open 24 June 2024 (AMD) $152.50 calls at………….………$16.55
Sell to short 24 June 2024 (AMD) 157.50 calls at…………............$12.35
Net Cost:……………………..…….………..…….....................................$4.20
Potential Profit: $5 - $4.20 = $0.80
(24 X 100 X $0.80) = $1,920 or 19.05% in 14 days
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bull Call Spread” by clicking here at
http://www.madhedgefundtrader.com/ltt-vbpds/
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep-in-the-money spread trades can be enormous.
Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
