February 2025 Options Now Available for Advanced Micro Devices (AMD)

Investors in Advanced Micro Devices Inc (ticker: AMD) saw new options become available today, with an expiration date of February 2025. One of the key data points that impacts the price an option buyer is willing to pay is time value, so with 227 days until expiration, the newly available contracts present a potential opportunity for put or call sellers to capture a higher premium than would otherwise be available on contracts with a shorter expiration date. In the Stock Options Channel, our YieldBoost formula searched the AMD options chain up and down for new February 2025 contracts and identified one put and one call of particular interest.

A put contract with a strike price of $175.00 currently has a bid of $21.50. If an investor were to sell to open this put contract, they would be committing to buying the shares at $175.00 but would also receive a premium, setting the underlying cost of the shares at $153.50 (before brokerage commissions). For an investor already interested in buying AMD shares, this could be an attractive alternative to paying $177.54 per share today.

Because the $175.00 strike price represents an approximate 1% discount to the current stock price (in other words, it is out of the money by that percentage), there is also a possibility that the put contract will expire worthless. Current analytical data (including Greeks and implied Greeks) suggest that the current odds of this happening are 62%. Stock Options Channel will track these odds over time to see how they change, publishing a chart of these numbers on our website under the contract details page for this contract. If the contract expired worthless, the premium would represent a 12.29% return on the cash commitment, or 19.75% annualized — at Stock Options Channel, we call this Increased efficiency.

Below is a chart showing the trading history of Advanced Micro Devices Inc. over the last twelve months, with the $175.00 strike price relative to that history highlighted in green:

Moving on to the call side of the option chain, the $190.00 strike price call has a current bid of $23.10. If an investor were to buy AMD stock at the current price of $177.54/share and then sell to open up this call as a “covered call,” they would be committing to selling the stock at $190.00. Given that the call seller also collects a premium, this would result in a total return (excluding dividends, if any) of 20.03% if the stock were to retire at its February 2025 expiration (before brokerage commissions). Of course, a lot of the potential upside could be left on the table if AMD stock really rally, which is why it’s important to look at Advanced Micro Devices Inc.’s trading history over the past twelve months, as well as examine the business fundamentals. Below is a chart showing AMD’s trading history over the past twelve months, with the $190.00 strike price highlighted in red:

Given that the $190.00 strike price represents about a 7% premium to the current stock price (in other words, it is out of the money by that percentage), there is also the possibility that the covered call contract will expire worthless, in which case the investor would keep both their shares and the premium they have collected. Current analytical data (including Greeks and implied Greeks) suggests that the current odds of this happening are 46%. On our website, on the contract details page for this contract, Stock Options Channel will track these odds over time to see how they change and will publish a chart of these numbers (the trading history of the options contract will also be plotted). If the covered call contract expires worthless, the premium would represent a 13.01% increase in additional return to the investor, or 20.92% annualized, which we call Increased efficiency.

The implied volatility in the put contract example, as well as in the call contract example, is approximately 48%.

Meanwhile, we have calculated that the true 12-month volatility (taking into account the closing values of the last 251 trading days and today’s price of $177.54) is 45%. For more ideas on put and call options contracts, visit StockOptionsChannel.com.

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