To The Moon

Four months ago, I embarked on a Wheel Strategy with AMD. The moment of truth arrived in the third week of April when my Cash Secured Put with a strike price of $150 was met, and the underlying shares were assigned.

For the past seven weeks, I've been actively selling Covered Calls against this lot of 100 shares. While a few of these options expired worthless, most were bought to close within a few short days, capturing quick profits whenever the odds favored me. The total profit from the initial put option and the subsequent call options amounted to $780. Additionally, the profit from the underlying stock itself was $1,750.

In total, this seven-week wheel cycle yielded a handsome profit of $2,530.

Had I merely held onto the underlying stock, it would have netted me $1,750 over the past seven weeks, assuming I sold at Friday's close. However, by employing basic options strategies, I managed to pocket an extra $780.

It's important to remember that this is a trade, not an investment. Trading seeks to capitalize on market volatility, squeezing out additional profits beyond the norm.

If I had ample funds, AMD would certainly be a long-term hold for its growth potential. However, with limited resources, I need to put in extra effort—monitoring price actions and seizing opportunities whenever they arise to maximize my advantage.

I could have rolled this last call option to a higher strike price, extending it to next week or later, as I believe there’s still room for AMD to climb. However, I’m ending this wheel strategy here to free up funds for my next venture: wheeling Nvidia. With Nvidia undergoing a 10-1 stock split and its shares soon to be in the $100 range, I can now deploy the same funds to wheel Nvidia. Oh boy, I’m looking forward to that!

PS: No, I will never even try wheel on GameStop. 😂

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