9 Minute Read

Tales of a Technician: Managing an AMD Bull Put Spread

April 11, 2022

By | No Comments

AMD shares are cracking support today and Team Phoenix has a practice bull put spread moving in the money. In today’s video, I share the various options for trade management and which one I’m using for the lab.

Join Phoenix Trading Lab!


Bull Put Spreads

3/23/2022: AMD @ $118

Sell April $100/$95 bull put spread for 53 cents. Max Loss $4.47

1) Exit at the short strike.

                A) Entered for 53 cents. Exited for $2.00. Lost $1.47 (3 winners)

2) If I’m willing to risk more in hopes that we bounce back before expiration, I might let the spread go ITM.

                A) What if the put spread is ITM at expiration?

                                i) Eat the max loss and be done.

                                ii) Allow assignment, and sell the 95 put if it’s ITM at expiration. Then you’re long stock. Sell cov call with enough time value to recoup my loss.

Long 100 shares of stock @ $99.47.

Sell a covered call so that I get out of the stock in May at $99.47 or above.

A) Sell OTM cov call. Short May $100 call for $6.70. New cost basis: $99.47 – $6.70 = $92.77

B) Sell ITM cov call. Short May $80 call for $19.85. New cost basis: $99.47 – $19.85 = $79.62

                I must sell my stock at $80 come May expiration. BUT even though I bought stock at $100, I received 53 cents from the bull put and $19.85 from the short call, thus reducing my basis $79.62. Even if I get assigned at $80, I will still make 38 cents!

Choice A: Close the bull put spread now and lose $1.47.

Choice B: Wait until Thursday, hopefully we bounce and I get out at a small loss or even.

Choice C: I don’t get out before Thursday and I convert into long stock at $99.47. Then I sell a May $80 covered call to get nearly $20 of protection and reduce my basis to just under $80. Then as long as we’re above $80 at May expiration, I made back all my loss.


One: I lost money in April ($147), my objective is to simply make back that $147 in May.

Two: Naked put is a synthetic covered call.

                A) May $80 cov call

Read more Tales of a Technician [FREE Content]

Tackle Trading: Financial Freedom is a Journey. Sign up now for a 15-day free trial.

Financial freedom is a journey

Sign up now and gain unfettered access to all of the quality content and powerful Scouting Reports that our Pro Members enjoy for 15-days absolutely free with no strings attached and let us show you what your trading has been missing.

Legal Disclaimer

Tackle Trading LLC (“Tackle Trading”) is providing this website and any related materials, including newsletters, blog posts, videos, social media postings and any other communications (collectively, the “Materials”) on an “as-is” basis. This means that although Tackle Trading strives to make the information accurate, thorough and current, neither Tackle Trading nor the author(s) of the Materials or the moderators guarantee or warrant the Materials or accept liability for any damage, loss or expense arising from the use of the Materials, whether based in tort, contract, or otherwise. Tackle Trading is providing the Materials for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Examples that address specific assets, stocks, options or other financial instrument transactions are for illustrative purposes only and are not intended to represent specific trades or transactions that we have conducted. In fact, for the purpose of illustration, we may use examples that are different from or contrary to transactions we have conducted or positions we hold. Furthermore, this website and any information or training herein are not intended as a solicitation for any future relationship, business or otherwise, between the users and the moderators. No express or implied warranties are being made with respect to these services and products. By using the Materials, each user agrees to indemnify and hold Tackle Trading harmless from all losses, expenses and costs, including reasonable attorneys’ fees, arising out of or resulting from user’s use of the Materials. In no event shall Tackle Trading or the author(s) or moderators be liable for any direct, special, consequential or incidental damages arising out of or related to the Materials. If this limitation on damages is not enforceable in some states, the total amount of Tackle Trading’s liability to the user or others shall not exceed the amount paid by the user for such Materials.

All investing and trading in the securities market involves a high degree of risk. Any decisions to place trades in the financial markets, including trading in stocks, options or other financial instruments, is a personal decision that should only be made after conducting thorough independent research, including a personal risk and financial assessment, and prior consultation with the user’s investment, legal, tax and accounting advisers, to determine whether such trading or investment is appropriate for that user.

Chart Modal

Tackle Trading

Book a FREE Consultation

Sign up for a free consultation to build your Educational Plan.