Replies to post #755 on Advanced Micro Devices Inc (AMD)

[Elmer Phud]

Yourbankruptcy -

it's very hard to play options on $5 stock. You can't even establish a spread. Your puts look great. Your calls most likely will be assigned, so you already know your profit. Are you comfortable with that profit? If yes, then your position is optimal.

No it's easy. You can write many more contracts for the same margin as you can for a $25 stock. BTW, I may roll those calls rather than allow assignment.

For conservative players I strongly suggest to go long and write July $5 calls for $1.30. That will make your entering point at $4. But profit will be very modest. I feel that Opteron is for gambling, not for investing. Right now I'm plain long.

You could write July $5 puts and pick up $0.85 without spending any cash. That would put your entry at $4.15 if assigned.

Thanks for sharing your thoughts. We don't all root for AMD but we all like making money.

EP