Advanced Micro Devices Could Be a Bargain Here, Especially for Options Traders

Advanced Micro Devices (AMD) has come down over 12% from its high on midday June 13 as it is at $113.17 on Friday, July 7. However now AMD stock is trading at an average P/E multiple. That makes it attractive to traders shorting its out-of-the-money put and call options which now have very high premiums. 

We discussed a short put option strategy three weeks ago in our June 18 article, “AMD Stock May Have Much Further To Go Based On Analysts' Estimates.” For example, the $113 put options expiring on July 7 expired worthless and the $115 strike price puts closed in the money by $1.83 (i.e., $115.00-$113.17).