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Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

The Cherry Bomb
May 15, 2019

Remember when bitcoin was a thing?  When it was the quintuple digit phenom?  When everyone who owned some was living crypto large?  Then it collapsed.  Well, bitcoin’s up about 50% in the last month, propelled lately by the turmoil in the markets as people figure it’s as safe a bet as anything else if the world ends.  And that will likely spur more mining farms (or farming mines?) looking to discover some while bitcoin is still just quadruple digits.  Just like the gold rush of old, it’s the people selling the picks and shovels that made more than the miners.  In bitcoin’s case, that’s likely AMD, which makes some of the chips useful in the process.  AMD is lower this week, but unchanged since its last earnings and is relatively strong compared to the rest of the market.   That might make you consider a bullish strategy in it, and with its 19% IV rank, that suggests long debit spreads.  If you are bullish on AMD, the long call vertical that’s long the 26 call and short the 28 call in the June weekly expiration with 44 DTE is a bullish strategy with a 62% prob of making 50% of its max profit before expiry and that generates $.07 of positive daily theta.
 

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Tom Sosnoff
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