Sweating Today’s Post-Earnings Drop in AMD Stock? Here’s How Options Collars Could Have Prevented the Pain.

Imagine saying this to yourself in your best sinister voice: “That’s a nice profit you have on that stock there. It would be a shame if something happened to it.”

That voice in my own brain fires off every time I have a situation like the one I assume many are in with Advanced Micro Devices (AMD). However the concept I’ll show here is a strategy that can be applied to any stock or ETF that has a reasonably liquid options market. I use the Barchart options screener frequently, both to find good collar setups on the names I follow, as well to determine if they are sufficiently liquid.