Last updated on February 13th, 2020
The market has produced one of the biggest 5 day rallies in a long time here this week.
We have seen 5 days in a row of impressive gains to the upside and as a result, the market is overbought in the near term.
If you are like me your portfolio is also probably leaning bullish given the move higher in stocks.
To help balance out my portfolio, with this weeks Options Trade Of the Week, we will be looking to put a neutral to bearish trade on Advanced Micro Devices (Symbol: AMD).
AMD – Overbought Trade Opportunity
AMD has enjoyed the move higher in equities this week as it is up almost 10% this week and 20% going back to late May.
The stock is now at a near term overbought condition.
To take advantage of this overbought condition we will look to see a call spread which will provide a neutral to bearish trade.
Instead of buying a long put to be bearish which would only give us one way of making money, we will be selling a call spread which will leave us with 5 ways of making money.
We are selling the July 5 Weekly 33.5/35 call spread for .45 or $45 per spread.
This means we are selling the 33.5 call and buying the 35 call at the same time to leave us in a risk defined trade.
For a complete break down of our Trade Of The Week make sure you review the video below.
We will cover the details of how we are placing trade trade including how we plan on managing it from start to finish.
Feel free to contact me directly with any questions you might have. Mike@netpicks.com.