Advanced Micro Devices Inc (AMD)

[HailMary]

IMO you don't want to limit your upside and expose yourself on the downside at the same time. Writing the covered call in this situation is doing just that. If the stock runs up, your profit is limited. If the stock retraces and you want to exit, you will have to repurchase the calls for a loss and then sell your shares.

Buying shares and writing a covered call is saying 'I think the stock is going to sit right where it is'. If that is how you feel, go for it. If you feel this way, but also want some downside protection, buy some puts with the covered call proceeds. This is known as a collar. You have essentially purchased the shares and locked in a maximum profit or loss. I personally don't like it, especially on a volatile stock like AMD.

If you are more bullish, I think a better play is to just buy some shares, and buy protective puts (14s or 15s) or have a stop loss strategy. Don't make it too complicated.

HailMary