Advanced Micro Devices Inc (AMD)

[HailMary]

Conservative, but a very good move if you plan on selling the stock anyway. Personally I would just write the put here. I think AMD is going to run some more into January, and maybe beyond given the possibility of flash recovery. Also, I see very little chance of the stock remaining flat given its recent volatility. My bet is you get assigned or called away, so be prepared to live with either one of these. I think a better strategy is write the puts this month, and write the calls sometime next month, but my assumption is AMD will be higher next month (in the $20 range). I really only like to write covered calls when the stock isn't on a huge momentum run as AMD is now. I always try to play the trend. I guess if you think the trend is over or you want to exit your position, writing covered calls is a good move.

You just reminded me it is about time to write my december puts. The last two months I've been putting the proceeds into buying calls, which made out extremely well. This month, however, I'm going to just keep the put writing proceeds as cash. Premiums are very nice right now...

HailMary