AMD Yolo Update – <24 hrs after position was opened.
Hi everyone. Been several requests for an update to the call options. This will be the last update until I exit my position. To answer the question: It’s up ~$240k usd since open & at the time of the screenshot (<24 hrs). I have no intention of selling today – I bought jan 2023 calls (leaps) because I believe that AMD is going to continue climbing. I will 💎 👐 this for a while.
Why only 240k? I thought calls meant 🚀🚀🚀. 100%+
- These are leaps. They expire in a LONG time & I bought the day before ER, so the premiums were expensive. The gains are not near as large as shorter dated options. Leaps behave a bit differently than short term options. I personally treat these as the same thing as running ~4-6x leverage long on AMD – with the benefit that I cannot get liquidated if the price moves against me.
- Leaps are not as susceptible to IV crush as shorter dated options. This is partially because we will see 3 more ER’s before these options expire, leading to very similar market conditions that we just experienced. IV will be high before all those ER’s too. This lets me continue to hold them, without worrying too much about decay. I tentatively plan to exit before next ER, market conditions pending.
Are you selling today? Lock in gains?
- No lol. I’m holding for at least 1-3 months. Let the winners ride. My thesis has not changed. I will post an update to WSB’s when I exit, but none before then (for my AMD position). I suspect we will see AMD continue to climb, and I hold my targets of $140-160 within 3 months.
- It’s really not that complicated. The company’s still growing like crazy. I have been following AMD for some time, and based off rumors that I was reading into I suspected that they would crush ER again. They overdelivered. AMD’s been in a non stop bull run for the last few years to match the company growth. Why would it stop here? It just dipped & (in my views) the market overreacted. It was the perfect opportunity for any bull to buy (Cramer was… RIGHT?!?). I view AMD like I view Tesla. Don’t bet against Lisa. Don’t bet against Elon. You won’t win. I don’t believe that $160 was the top, but rather a side effect of macro conditions (everything dumped) combined with people taking massive gains (it hit $160 fairly quickly). $100 was the bottom – it hit it very quickly and lots of paper hands got worried and sold. I don’t believe the macro market will continue dipping (We have already bottomed for the next ~3 months) which gives me a few months of room to grow these leaps. I may reconsider when interest rates start going up.
Why leaps? Why not shares?
- Leaps give me cheap access to leverage, which is what I am using them for with my AMD investment. If it hits ~$160 within the next quarter, shares would net me ~50% returns, whereas leaps will be ~300%+.
If you think it’s going to hit $160 within the next quarter, why not buy options with a closer expiry?
- Leaps are a bit of a hedge. It’s true that they don’t gain value as quickly as shorter dated options. However – IF I AM WRONG and the share price plummets, I can keep holding. I am often wrong in the short term. I believe in my thesis, and that they will hit ATH’s by EOY. My targets are sooner, but sometimes the markets disagree. Leaps let me have the option for either to occur. I am long term bullish on AMD, and would be okay if they dipped 5-10-20%. I’d just keep holding.
What do you do for work? How did you get this money?
- I am a software engineer. However, the majority of my money has been made via my own high risk investing. My investment style is not suitable for most people. My primary investments are into leaps as I like the leverage they offer.
- Nothing right now. I’m just going to sit on my current portfolio for a bit. Likely just wait for a good exit on AMD.
Position update: https://imgur.com/a/sU7LT06
Submitted February 02, 2022 at 05:15PM by yardsale2
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