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Past Trades

Our May 2024 Options Trade: AMD

It was a big news day for AMD, though most of the headlines weren’t picked up in news feeds. First, Elon Musk’s AI startup – xAI – was reported to have chosen Oracle (cloud) and AMD (GPUs) for their new datacenters to be built with the $6 bln they just raised. I would guess AMD’s resulting revenue would amount to roughly $600 mln to $1,200 mln based on the likely number of GPUs to purchase.

The purchase could be a vote of confidence in AMD, or it could be the result of AMD being the only available GPU for 2024 and early 2025 delivery and/or the fact that AMD is 1/3 the price of NVIDIA. If we knew the planned startup that would help (If it’s in late 2025 or 2026 then NVIDIA would have been in play). Either way, it’s a nice contract for AMD.

AMD has been gaining significant market share in their CPU segment as Intel stumbled with their latest generation of CPUs. Windows 12 is expected to be announced in June and will shift AI workloads away from cloud and data centers to local PCs.

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Energy Transfer Limited Partnership (ET)

Our February 2024 Options Trade: Energy Transfer Limited Partnership

Our January covered call trade involves buying ET units at $14.04 and writing February 16th, $12.00 calls for $2.07. Our
January trade should generate a 2.46% gain (including an anticipated $.315 per unit distribution) if ET units trade at $12.00
(or above) at the options expiration – a 27.91% annualized return. The trade breaks even if ET trades down to $11.66 – a full
$2.39 per share (16.99%) below the current price.

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Our December 2023 Options Trade: iShares 20+ Year Treasury Bond ETF (TLT)

REAL interest rates are as high as they have ever been – even after the Street has started pricing in lower interest rates for the last 5 weeks!

To me and my colleague Nathan Weiss, that makes the 20+ Year Treasury Bond ETF (TLT-NYSE) an InTheMoney bank trade – likely for most of 2024 as well.

This is the second options trade on TLT for Nathan Weiss and myself in the last month. The first trade–on Nov 18 – we advised our readers to write December 15th, $85.00 covered calls on TLT shares, earning a 1.46% return as long as TLT shares are trading at or above $85.00 when the options expire – a 17.5% annualized return.

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