Options Corner: AMD's A.I. Rally

Core Viewpoint - The discussion focuses on a conservative trading strategy for AMD, leveraging elevated implied volatility while avoiding the upcoming earnings report, which could introduce additional market volatility [2][3][5]. Group 1: Trading Strategy - The proposed trade involves selling an out-of-the-money put vertical, specifically the 210 strike put, to increase the probability of success in a bullish scenario [4][5]. - The trade aims to collect approximately $250 per spread, with a break-even point set at $207.50, which is about 6% below the current share price [5][6]. - The probability of the short 210 strike being out of the money at expiration is estimated to be around 60% [6]. Group 2: Market Context - AMD shares have experienced significant growth, up about 80% year-to-date, contributing to elevated implied volatility levels in the market [2]. - The overall market has shown considerable fluctuations, impacting AMD's stock performance, which was previously down over 1% before recovering to a 2% gain [1][5]. - The current market conditions are described as choppy, making a conservative approach more appealing for traders [7][8].