Stock Option Investment Advice

Bearish Sentiment on AMD Returns +14.7 in April 2007

In article “AMD vs. Intel (INTC) – Semiconductor War” we mused about the prospects for AMD and decided AMD may indeed turn it around in the long run, but in the short run AMD is one semiconductor wafer short of a full load. In the article, we also selected a bear call credit spreads position for AMD and the position was fully profitable returning a sweet +14.7% return.

AMD recently posted a larger quarterly loss than was expected. AMD also plans to make fundamental changes to the company for the longer term, but AMD did not provide specific details regarding pending changes.

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Unless AMD is acquired or merges, AMD’s stock price is looking really bearish. Using PowerOptions powerful stock options search tools, we found the following bear call credit spreads position for AMD.

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Bear-Call Credit Spread Search Results
Bid Buy
Ask %
AMD 14.28 AMDEC 07 MAY 15.0 (22) 0.23 AMDEH 07 MAY 17.0 (22) 0.04 10.5
(For more details click the ticker symbol above)

The bear call credit spreads position found for AMD has a potential return of 10.5% if AMD’s stock price remains below the short call strike price of $15 at stock options expiration in May of 2007 which is just 22 days away. The position starts to become less profitable as the stock price closes below $15 at stock options expiration. If the price of the stock drops below the long call strike price of $17.0, the position essentially loses everything except the initial credit of $19 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 AMD 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] bear call credit spreads, investment strategy, iron condor, option income, poweroptions, selling naked puts, stock option trading, stock options [/tags]

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