You think chip stocks are yesterday’s bulls? Think again. While other stocks in the semiconductor sector have been weak recently, AMD jumped 9% yesterday, the equivalent of 2.44 standard devs, pulling it out of its post-earnings slump and closer to the all-time high it hit in late October. The company’s CEO laid out a bullish forecast for AI in general and AMD’s profits in particular. And why not? AMD smoked earnings estimates last week, and AMD has room to grow. AMD’S OTM calls are trading over equidistant OTM puts, indicating that the market sees continued risk to the upside. That might be enough for a trader to consider a bullish strategy. AMD’s IV has dropped off after earnings, but its 56% overall IV and 32% IV rank are still high enough to make short premium trades attractive. If you think AMD might continue to rally over the next few weeks, the short put vertical that’s long the 235 put and short the 240 put in the December weekly expiration with 43 DTE is a bullish strategy that collects a credit 1/3 the width of its strikes, has a 76% prob of making 50% of its max potential profit before expiry, and that generates $1.08 of positive daily theta.
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