As of February 5, 2025, Advanced Micro Devices (AMD) is trading at $110.32, suffering a 9.18% drop from the previous close.
📉 Earnings Recap
AMD's latest earnings report showed strong overall revenue, but its data center segment underperformed, triggering a sharp decline in stock price.
Given current market sentiment and technical indicators, a bearish options strategy is worth considering.
🏆 Trade Setup: Bear Call Credit Spread
✅ Sell the AMD $115 Call (March Expiry)
✅ Buy the AMD $120 Call (March Expiry)
💰 Max Credit: $1.50 per contract
⚠️ Max Risk: $3.50 per contract
📏 Break-even Price: $116.50
📊 Why This Trade?
🔹 Technical Resistance: The $115 level has acted as resistance, and the recent decline suggests it may continue to do so.
🔹 Implied Volatility (IV): Elevated IV makes selling options premiums more attractive.
🔹 AI Confidence Score: 78% probability that AMD remains below $115 through expiration.
🚨 Risk Factors & Considerations
🔍 Upcoming Events: Stay alert for announcements that could impact price movement.
📊 Market Volatility: Broader trends may influence AMD’s trajectory.
❌ Stop-Loss Plan: Consider exiting if AMD closes above $116.50.
💡 Pro Tip: This bear call spread offers a strategic way to profit from AMD's potential stagnation below $115 while limiting downside risk.
📢 Trade smart & stay disciplined!
AMD