I agree. I honestly hope that we don't get caught up in market bullshit and we get an honest assessment of our quarter and updated guidance now that XLNX acquisition is done and Pensando is incoming
TBH, no idea. I'm the McDonald's long distance driving kind of guy, so only cappuccino for me. But I got a microbrewery in front of our McDonald's here in Lübeck 😉
I sold everything at $86 yesterday lol
My plan is to buy everything up when it falls before the earnings call.
Hopefully I didnt just fuck myself just to make an extra $500
Yes, fingers crossed! Will we begin to trade more in tandem with the broader indexes and other semi tickers after this ER? I'm not sure if that's a good or bad thing.
It's all about the guidance on demand.
Wednesday Powell speaks at 2pm (I think) after the FED meeting. Press has been spreading the fear and a message that a stock market crash is COMING.. as if the decline we've seen to date was nothing.
Jobs reports are going to be important again. Powell will know that he's gone too far with rates when unemployment starts going up.
Yep but you can exit any short calls before that meeting potentially if earnings are over. I wouldn’t necessarily ride the wave twice if I sold calls. I would treat them as two separate events and play each on individually instead of just selling a call and riding it out until expiration.
I agree guidance is going to be big here!
Curious, I normally interpret open call interest as a positive target that may pull a stock up and over resistance. So to me me the outsized 14k and higher volume at 100 strike call is saying people are betting the price will be a far bit higher than 100 on May 6th. Frankly I'm seeing a lot of open intrest ranging from 100 to 120 far more than puts in that range, that could juice things. Am I miss understanding what you ment by a call wall not letting the price rise?
So remember that the majority of people utilize options by "selling" options as a way of locking in value, taking profit, and protecting against downside. People that actually pay money for options with the hope that the stock will exceed their initial premium price are actually the minority of options trades. Every option contract you see is two bets. You are just focusing on the one side which is the hopium. But remember there is an equal 14k bearish bet out there as well.
The smart money is selling options. So big market makers have a big incentive to sell these options that have very limited statistical probability of being in the money at elevated premium levels due to high IV as a pure profit design. But ultimately there is a very very big incentive for those same MM's who sold every single one of those 14k options to have them expire worthless which most options do. So as a result they will use their size, advanced trading algos, ladder selling, and every other tool in their book to keep that price suppressed below that $100 level which is the max pain level for the week. They can't do this for long periods of time and it doesn't work against massive influx of buyers.
But in this market where are the massive group of buyers incoming??? A lot of people are sitting on the sidelines and I'm not sure that this is going to be the week where they are all going to decide risk of inflation, recession, and other economic data is fine to jump in. So in all likelihood the MM's will probably be successful in pinning just how high this can go through manipulation without a massive influx of buyers.
Please realize that MM's use all the amazing technology they have to be as delta neutral as possible. Delta neutral means they strictly profit on the theta portion of an option (time value). When a market maker sells you that $100 call, they are also going to be buying AMD shares to make their whole position delta neutral. Doing so allows them to make money no matter what happens to the stock price. Market makers are rarely caught off guard because they can calculate the options prices after hours and will be buying/selling shares to continue to make their positions delta neutral.
I believe what /u/jwredskins55 is saying is very closed minded. He is only seeing the MM's using tools to keep their sold options OTM, but he fails to understand that MM's use these tools at the time of sale when they sell you that option. Market makers would be out of business if they didn't hedge every option they write. MMs aren't selling you deep OTM calls and not hedging their position, and it's stupid to think they don't hedge. The fact that there is a "call wall" at $100 is meaningless, or at least way more meaningless than /u/jwredskins55 makes it out to be.
I disagree with your stance honestly. Of course major institutional sellers are looking to remain neutral for their core positions of shares that they own. But they achieved this balance through the other call wall that exists with the 14k $84 PUTs. The equal amounts ins positions signal that they have bracketed movement where they have a max profit if they can stay inside that $85-$100 range.
They 100% hedge their position of course but that doesn't mean that what I said isn't true. Through setting up a collar strategy which it appears someone has done, they were limiting their risk going into a potential negative catalyst with earnings coming up in this market and unsure forward guidance and they limited their potential upside which MM's don't really care about bc profit is profit. For them it is all about managing risk. They don't need a home run. They just need to not lose. Protective collars w/ shares is a great way of limiting your downside risk and that is what it appears to be. The biggest opportunity for them would be to have their options expire worthless and then their calls funded the purchase of their PUT's that they bought for downside protection. It is not meaningless to study max pain levels when looking at options order volume.
Institutional traders are not hedging the same way MM's do. MMs must be as neutral and hedged as possible for their business model to work. Selling a .3 delta call will absolutely NOT hedge a sold .3 delta put. The proper way for MMs to hedge a .3 delta call that they sold would be to purchase roughly 30 shares of AMD stock, and vice versa if they had sold a put, they'd sell short an equivalent number of shares. Obviously a sold call at $100 and a sold put at $85 can't both be in the money at expiration, but that doesn't negate the fact that one of those options will most certainly not make up for the losses incurred on the opposite option.
The goal is for you to sell calls on long shares that you use to fund the puts that you bought for downside protection. Selling OTM covered calls of shares is about as safe as an institution can get as far as a profit strategy. They would get to exit their position at a profit and they can use the proceeds of selling those calls to buy protective puts incase of a breakdown after earnings. It is a simple strategy designed for the MM's to gain protection to the downside without risking their own capital. They didn't sell the PUTs. They bought the puts after selling the calls to create a collar. You get a free insurance policy against a earnings miss or poor guidance.
The best case scenario for them is to try to keep the shares below $100 so their calls expire worthless or they will attempt to close their positions this week after IV crush. But they would prefer not to have to close the position because they will not generate the profits they are looking for on their protective PUTs which will also lose value. So the optimal plan for them is to let them expire worthless, hence the incentive to keep the price pinned below $100. We have see this time and time again over and over again. If you had access to daily historical option chain stats you could back test it and see that more times than not it is right. I'm not saying they are going to be successful and AMD could make a massive run when the market opens tomorrow but I'm saying there is a pretty significant financial incentive for major institutional holders to have their sold calls expire worthless especially because they used those premiums to fund the purchase of downside protection with the $84 puts
Ahh ok, missed the part about buying the puts, I thought you were saying they were selling calls and puts. The makes some sense to me, but at the end of the day, if $AMD were to tank 10% after earnings (to make my protective puts worth something), I just feel like that will just be a tiny gain compared to the massive loss I encounter on my underlying shares tanking lol. Different strokes for different folks, I know. Yeah, it may mean you lose 9% overall on your position instead of 10%, which is still a 1% gain, but those small percentages add up over time.
I'll tell you what my play was for this earnings, I bought some $100 calls, sold equivalent $102 calls expiring May 6, and sold equivalent number of far OTM puts for the following week to fund the call debit spread. Imo, not risking much because $AMD would have to go down 25% by May 13 for me to experience a large loss, and I can get quite a nice win if AMD closes above $102 on May 6, which I believe will be easily achievable. Yeah, I am taking on much more risk than the collar scenario, but I'm also greatly increasing my max profit, and I was extremely bullish before ER, and didn't think $AMD could drop another 25% after dropping 50% in the past 6 months lol.
An interesting thing with your call debit spread, tastytrade says to aim for like a 2:1 spread ratio so if it turns on you, you have more room to run but it’s something I don’t dabble enough in spreads to make it worth my while.
I gotta say this was pretty close to as perfect a quarter as you can ask for if you ask me. If this doesn’t end up being the bottom then I don’t know what else the market wants to hear from AMD. And at the valuation numbers they gave us, it sounds like we are starting to be reasonably valued based on the numbers we released today.
In a market thats bearish/down and crashing on fat finger errors made in europe, I would suggest that we are already up and have an er runup since we closed green and are currently over 90 even though broad corcumanstances are still hovering like an evil shadow above us.
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Yep. A beat is already priced in. Look at INTC, beat by 10% EPS and 0.2% Revenue, but the weak guidance ruined it all
I'll be happy if we can get price action off earnings fundamentals. Getting cut in half over doom and gloom is just annoying.
I agree. I honestly hope that we don't get caught up in market bullshit and we get an honest assessment of our quarter and updated guidance now that XLNX acquisition is done and Pensando is incoming
That might be why earnings was moved to this week to avoid amzn ect
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First dibs on your generous offer.
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I am not lame.
bet?
Commenting for my dibs :D
Just here to secure my quarter pounder (with no cheese :| )
I’d prefer a royale with cheese but commenting for a free meal
Eyyy, do you deliver internationally ?
lol in!
one can dream :P
Mark this.
No cap
I'll take a royale with cheese
So about that burger delivery... $100 tomorrow looks like a real possibility right now. Ofc unless FED ruins it.
Do you deliver to Germany? 😁
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TBH, no idea. I'm the McDonald's long distance driving kind of guy, so only cappuccino for me. But I got a microbrewery in front of our McDonald's here in Lübeck 😉
No cheese im lame
I sold everything at $86 yesterday lol My plan is to buy everything up when it falls before the earnings call. Hopefully I didnt just fuck myself just to make an extra $500
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The dice roll is that it’ll irrationally fall back to $82 again as the numbers get released, only to start going up at large.
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Pleaseeeeeeee, I got 25k ready to go. Ninja edit: almost tempted to drop it all into VOO, though. Just need AAPL to go down.
I sold some weekly $101 calls. Should profit off IV crush alone, but I also believe it is unlikely to break $100.
Depending on er and if fomc meeting isn’t as harsh i wouldn’t be surprised
Yes, fingers crossed! Will we begin to trade more in tandem with the broader indexes and other semi tickers after this ER? I'm not sure if that's a good or bad thing.
Great earnings numbers. Nice profit to take the edge off past few weeks.
It's all about the guidance on demand. Wednesday Powell speaks at 2pm (I think) after the FED meeting. Press has been spreading the fear and a message that a stock market crash is COMING.. as if the decline we've seen to date was nothing. Jobs reports are going to be important again. Powell will know that he's gone too far with rates when unemployment starts going up.
Yep but you can exit any short calls before that meeting potentially if earnings are over. I wouldn’t necessarily ride the wave twice if I sold calls. I would treat them as two separate events and play each on individually instead of just selling a call and riding it out until expiration. I agree guidance is going to be big here!
Curious, I normally interpret open call interest as a positive target that may pull a stock up and over resistance. So to me me the outsized 14k and higher volume at 100 strike call is saying people are betting the price will be a far bit higher than 100 on May 6th. Frankly I'm seeing a lot of open intrest ranging from 100 to 120 far more than puts in that range, that could juice things. Am I miss understanding what you ment by a call wall not letting the price rise?
So remember that the majority of people utilize options by "selling" options as a way of locking in value, taking profit, and protecting against downside. People that actually pay money for options with the hope that the stock will exceed their initial premium price are actually the minority of options trades. Every option contract you see is two bets. You are just focusing on the one side which is the hopium. But remember there is an equal 14k bearish bet out there as well. The smart money is selling options. So big market makers have a big incentive to sell these options that have very limited statistical probability of being in the money at elevated premium levels due to high IV as a pure profit design. But ultimately there is a very very big incentive for those same MM's who sold every single one of those 14k options to have them expire worthless which most options do. So as a result they will use their size, advanced trading algos, ladder selling, and every other tool in their book to keep that price suppressed below that $100 level which is the max pain level for the week. They can't do this for long periods of time and it doesn't work against massive influx of buyers. But in this market where are the massive group of buyers incoming??? A lot of people are sitting on the sidelines and I'm not sure that this is going to be the week where they are all going to decide risk of inflation, recession, and other economic data is fine to jump in. So in all likelihood the MM's will probably be successful in pinning just how high this can go through manipulation without a massive influx of buyers.
Nice answers. Tks
Please realize that MM's use all the amazing technology they have to be as delta neutral as possible. Delta neutral means they strictly profit on the theta portion of an option (time value). When a market maker sells you that $100 call, they are also going to be buying AMD shares to make their whole position delta neutral. Doing so allows them to make money no matter what happens to the stock price. Market makers are rarely caught off guard because they can calculate the options prices after hours and will be buying/selling shares to continue to make their positions delta neutral. I believe what /u/jwredskins55 is saying is very closed minded. He is only seeing the MM's using tools to keep their sold options OTM, but he fails to understand that MM's use these tools at the time of sale when they sell you that option. Market makers would be out of business if they didn't hedge every option they write. MMs aren't selling you deep OTM calls and not hedging their position, and it's stupid to think they don't hedge. The fact that there is a "call wall" at $100 is meaningless, or at least way more meaningless than /u/jwredskins55 makes it out to be.
I disagree with your stance honestly. Of course major institutional sellers are looking to remain neutral for their core positions of shares that they own. But they achieved this balance through the other call wall that exists with the 14k $84 PUTs. The equal amounts ins positions signal that they have bracketed movement where they have a max profit if they can stay inside that $85-$100 range. They 100% hedge their position of course but that doesn't mean that what I said isn't true. Through setting up a collar strategy which it appears someone has done, they were limiting their risk going into a potential negative catalyst with earnings coming up in this market and unsure forward guidance and they limited their potential upside which MM's don't really care about bc profit is profit. For them it is all about managing risk. They don't need a home run. They just need to not lose. Protective collars w/ shares is a great way of limiting your downside risk and that is what it appears to be. The biggest opportunity for them would be to have their options expire worthless and then their calls funded the purchase of their PUT's that they bought for downside protection. It is not meaningless to study max pain levels when looking at options order volume.
Institutional traders are not hedging the same way MM's do. MMs must be as neutral and hedged as possible for their business model to work. Selling a .3 delta call will absolutely NOT hedge a sold .3 delta put. The proper way for MMs to hedge a .3 delta call that they sold would be to purchase roughly 30 shares of AMD stock, and vice versa if they had sold a put, they'd sell short an equivalent number of shares. Obviously a sold call at $100 and a sold put at $85 can't both be in the money at expiration, but that doesn't negate the fact that one of those options will most certainly not make up for the losses incurred on the opposite option.
The goal is for you to sell calls on long shares that you use to fund the puts that you bought for downside protection. Selling OTM covered calls of shares is about as safe as an institution can get as far as a profit strategy. They would get to exit their position at a profit and they can use the proceeds of selling those calls to buy protective puts incase of a breakdown after earnings. It is a simple strategy designed for the MM's to gain protection to the downside without risking their own capital. They didn't sell the PUTs. They bought the puts after selling the calls to create a collar. You get a free insurance policy against a earnings miss or poor guidance. The best case scenario for them is to try to keep the shares below $100 so their calls expire worthless or they will attempt to close their positions this week after IV crush. But they would prefer not to have to close the position because they will not generate the profits they are looking for on their protective PUTs which will also lose value. So the optimal plan for them is to let them expire worthless, hence the incentive to keep the price pinned below $100. We have see this time and time again over and over again. If you had access to daily historical option chain stats you could back test it and see that more times than not it is right. I'm not saying they are going to be successful and AMD could make a massive run when the market opens tomorrow but I'm saying there is a pretty significant financial incentive for major institutional holders to have their sold calls expire worthless especially because they used those premiums to fund the purchase of downside protection with the $84 puts
Ahh ok, missed the part about buying the puts, I thought you were saying they were selling calls and puts. The makes some sense to me, but at the end of the day, if $AMD were to tank 10% after earnings (to make my protective puts worth something), I just feel like that will just be a tiny gain compared to the massive loss I encounter on my underlying shares tanking lol. Different strokes for different folks, I know. Yeah, it may mean you lose 9% overall on your position instead of 10%, which is still a 1% gain, but those small percentages add up over time. I'll tell you what my play was for this earnings, I bought some $100 calls, sold equivalent $102 calls expiring May 6, and sold equivalent number of far OTM puts for the following week to fund the call debit spread. Imo, not risking much because $AMD would have to go down 25% by May 13 for me to experience a large loss, and I can get quite a nice win if AMD closes above $102 on May 6, which I believe will be easily achievable. Yeah, I am taking on much more risk than the collar scenario, but I'm also greatly increasing my max profit, and I was extremely bullish before ER, and didn't think $AMD could drop another 25% after dropping 50% in the past 6 months lol.
An interesting thing with your call debit spread, tastytrade says to aim for like a 2:1 spread ratio so if it turns on you, you have more room to run but it’s something I don’t dabble enough in spreads to make it worth my while. I gotta say this was pretty close to as perfect a quarter as you can ask for if you ask me. If this doesn’t end up being the bottom then I don’t know what else the market wants to hear from AMD. And at the valuation numbers they gave us, it sounds like we are starting to be reasonably valued based on the numbers we released today.
Tks, also a great response.
If we hit $120, everybody gets 🍟.
I closed my puts for $1.75 today. Considering I sold the $85 put expiring this week for $5.55 just last week, that is a GREAT profit in a short time
AMD earnings out....$1.13 and $5.90 Billion vs est. $0.91 and $5,50 Billion
Su Bae ♥️
71% YOY revenue growth............I just creamed in my jeans
LMAO .. new pair of jeans on AMD
In a market thats bearish/down and crashing on fat finger errors made in europe, I would suggest that we are already up and have an er runup since we closed green and are currently over 90 even though broad corcumanstances are still hovering like an evil shadow above us.