AMD Options Trading Shows Potential for Strategic Investment

AMD Options Opportunity: Investors can leverage new contracts trading for December 2027, showing a potential 20.95% yield boost from put sales and a 51.30% return from covered calls. The attractive pricing may influence AMD stock's future performance.

Date: 15-03-2025

AI Rating: 7

Options Trading Insights: The report highlights new options for Advanced Micro Devices Inc (AMD) with expiration in December 2027. Investors can benefit from these long-dated contracts to achieve higher premiums than shorter-dated options.

The $95.00 strike price put contract provides an opportunity for investors willing to buy at that level, factoring in a premium that lowers the effective purchase price to $75.10. Given the current price of $99.24, this represents a 4% discount, appealing for potential buyers.

If the put expires worthless (which has a 73% chance), it could yield a 20.95% return on the cash commitment, or 7.58% annualized, which is generally positive for investors seeking passive income streams.

On the calls side, the $125.00 strike price call contract indicates that an investor purchasing shares at $99.24 could realize a total return of 51.30% if the call is exercised at expiration. However, there's a 41% chance it might expire worthless, allowing the investor to retain their shares and premium, resulting in a 25.34% additional return or 9.17% annualized return.

Implied Volatility: The put and call contracts show implied volatility of 49% and 47%, respectively, with actual trailing twelve-month volatility at 45%. This suggests that the market anticipates significant movement in AMD's stock price, which could influence its attractiveness to investors.

Stocks: AMD