[Opening Condor on Advanced Micro Devices (AMD)/Simultaneously Selling the Jun 15 Puts (AMDRC) Buying the Jun 14 Puts (AMDRP) Selling Jun 16 Calls (AMDFQ) and Buying Jun 17 Calls (AMDFY)/Limit Credit of $0.45/Day Order]
Dear Member,
I am placing an order to open a "condor" on AMD. For those unfamiliar with a "condor", in this case, it is a four legged trade consisting of a bearish call spread and a bullish put spread. It takes in an initial credit and looks for the stock to trade in the range between the two options that are sold. In this case, I am selling the Jun 16 calls (AMDFQ) and selling the Jun 15 puts (AMDRC). I am then buying the higher strike call (Jun 17 - AMDFY) and the lower strike put (Jun 14 - AMDRP) as protection in case the stock moves sharply in either direction. Thus this is a trade with relatively low risk and limited reward. Only one side of the trade, either the bear call spread or the bull put spread can lose, but both sides can win if the stock is between 15 and 16 at expiration. Of course, if the stock runs in either direction, I can adjust the trade. As you can see, this stock has $1 strikes. This trade, since it does have four legs is fairly heavy on commissions.
I am simultaneously selling the Jun 15 Puts (AMDRP), buying the Jun 14 Puts (AMDRP), selling the Jun 16 Calls (AMDFQ) and buying the Jun 17 Calls (AMDFY)for a net credit before commissions of $0.45.
DISCLOSURE: At the time of publication, I have no position in the underlying stock or the referenced options.
Sincerely,
Bill Kraft for
CutLoss, Inc.
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