$AMD at $582: Sell the $700 Call and Collect $1,230 Upfront

💰 Own 100 Shares of $Advanced Micro Devices(AMD)$ ? Here's How to Collect $1,230 in Options Premium

You could collect $1,230 today on 100 shares of $AMD you already own.

It's called a covered call. Here's how the strategy works.

📌 The Setup

$AMD is trading around $582, making 100 shares worth approximately $58,200.

You sell one $700 call expiring December 18 and collect:

• Strike price: $700

• Premium: $12.30 per share

• Total premium: $1,230

• Time to expiration: 36 days

• Strike price: Approximately 20% above the current stock price

In exchange, you agree to sell your 100 shares at $700 if AMD finishes above that level at expiration.

🎯 Two Possible Outcomes

Scenario 1: $AMD stays below $700

The call expires worthless.

✅ You keep the $1,230 premium.
✅ You retain all 100 shares.
✅ That's a 2.1% return on the current share value over 36 days.

You can then consider selling another covered call.

Scenario 2: $AMD finishes above $700

Your shares are called away at $700.

Here's the math:

• Gain from $582 to $700: $11,800

• Premium collected: $1,230

• Total potential gain: $13,030

• Return on current share value: Approximately 22.4%

You don't necessarily have to hold until expiration, either. My usual approach is to buy back the call after it loses roughly half its value, lock in the profit, and then look for the next opportunity.

⚠️ What You Give Up

There are two important trade-offs:

🔻 Limited upside: Your gains from the shares are capped at $700. If AMD rallies to $800, you miss out on the additional upside above your strike price.

🔻 Downside exposure remains: The $1,230 premium provides only a limited cushion if AMD falls. Your effective breakeven from today's price is approximately $569.70.

📅 One more consideration: AMD isn't expected to report earnings until after December 18, so no earnings announcement is scheduled within this trade's expiration window.