For many years AMD was more of a nuisance than competition for Intel (INTC), but in recent years AMD has provided some pretty good competition for Intel.
AMD recently warned it would not meet its projected revenue for the first quarter of 2007, mostly a result of Intel putting significant pressure on AMD’s profit margins.
AMD recently acquired graphics and chipset semiconductor maker ATI hoping to gain a competitive edge over Intel through integration of the two company’s products, but positive results from the merger will take time to come to fruition, so AMD’s short term prospects are looking pretty grim.
Competitors:
Competitors for AMD include: Intel Corp. (INTC), Freescale Semiconductor, Inc. (private), IBM Microelectronics (private), and Atmel Corp. (ATML).
Potential Trades:
AMD’s stock price has been on the decline for the last year, but was recently buoyed after rumors AMD might be acquired through private equity. Unless AMD is acquired or merges, AMD’s stock price is looking really bearish in the near term. Using PowerOptions powerful stock options search tools, we found the following bear call credit spreads position for AMD.
| Bear-Call Credit Spread Search Results | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price |
Sell Option |
Expire/Strike | Bid | Buy Option |
Expire/Strike | Ask | % Return |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| AMD | 13.92 | AMDDC | 07 APR 15.0 (47) | 0.46 | AMDDW | 07 APR 17.5 (47) | 0.14 | 14.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The bear call credit spreads position found for AMD has a potential return of 14.7% if AMD’s stock price remains below the short call strike price of $15 at stock options expiration in April of 2007 which is just 47 days away. The position starts to become less profitable as the stock price closes above $15 at stock options expiration. If the price of the stock rises above the long call strike price of $17.5 at stock options expiration, the position essentially loses everything except the initial credit of $32 per option (100 shares).
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the bear call credit spreads investment strategy.
PowerOptions provides Internet based tools for analyzing stock options with specific search criteria and for finding potentially lucrative option income. For those seeking to execute a bear call credit spreads investment strategy for their personal portfolios, PowerOptions provides an Internet based search engine for finding potentially lucrative income producing bear call credit spread options positions.
PowerOptions‘ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, iron condor and selling naked puts stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags] Freescale Semiconductor, Inc., IBM Microelectronics, ATML, Atmel Corp., INTC, Intel Corp., bear call credit spreads, investment strategy, iron condor, option income, poweroptions, selling naked puts, stock option trading, stock options [/tags]