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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 203.14-0.8%Jan 9 9:30 AM EST
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To: TechieGuy-alt who wrote (5605)8/18/2000 4:14:58 PM
From: Gopher BrokeRead Replies (1) of 275872
 
Rather than express an opinion on what you should do, which is apparently a very bad idea let me tell you what I plan to do, FWIW. (I have 90 September call contracts, at strikes of 60 and 70.)

Firstly I will be looking to exit or roll forward at least two weeks prior to expiry. AMD may break the mould this time around but it has been remarkably consistent at expiring at max pain, and I suspect max pain for Sept may well be below the $80 mark. I would guess a lot of people have been loading up on Sept options while AMD was depressed. Best to get out before the expiry downtrend begins.

I certainly plan to hold until after the split. It is irrational, but I believe that people will prefer to buy AMD at $35 with a great EPS than AMD at $70 with an outstanding EPS.

If we start to climb after the split then I will look for signs of a short squeeze. If AMD moves up more than $5 in a day (post split) then I will close my options position and wait for a dip to buy back in.

Otherwise, if AMD are still below a post split price of $50, I will roll forward at around the first week in September. AMD above $50 and I may well just cash in my Sept options and invest it in other areas. (I am too heavily into AMD and I would keep some Jan 01 and Jan 02 options to satisfy my thirst for the big gainer!).
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