ng,
Just finished a review of my AMD files and charts...and they are telling me that AMD July calls may be one of the most rewarding investments for Y2000.
I am looking at those as well, and I find them incredibly expensive. Which strikes do you like?
I am looking at May bull spreads now. Consider this: Buy May 60 for 18 1/4 (ask), sell May 80 for 7 1/8 (bid) for a debit of $1,112.50 per contract. If the stock ends up above 80, you realize maximum profit of $2,000 per contract, or 79% gain in 1 month. (you have 2 more months to do this until July). Breakeven is 60 + 11 1/8 = 71 1/8. If the stock ends up below 71 1/8, you lose money, anything above, you make money.
A slightly safer (but less rewarding) choice would be let's say May 55 long call and May 75 short call. May 55 call is 21 7/8 ask, May 75 is 9 1/4 bid. The cost to acquire it is 12 5/8, or $1,262.50 per contract, the maximum profit (at $75 and higher) $2,000 again, but only 58% return. Breakeven is at 55 + 12 5/8 = 67 5/8.
Joe |
