With the market in red and no more catalysts coming up for semiconductor powerhouses, AMD and Nvidia, I took the opportunity to sell the LEAPS of AMD and Nvidia, which was purchased a few months ago, to lock in my profits. The details of the LEAPS contracts are shared below, for reference:
Type of Contract: LEAPS
Stock Name: AMD
Strike Price: $80
Expiration Date: 20 Jan 2023
Delta: 0.8
Bought when the share price was: $107.9
Bought on: 2 Aug 2021
Premium paid: $3,660
Premium collected: $7,300
Returns: 101%
Type of Contract: LEAPS
Stock Name: Nvidia
Strike Price: $300
Expiration Date: 16 June 2023
Delta: 0.37
Bought when the share price was: $220.5
Bought on: 15 Sep 2021
Premium paid: $2295
Premium collected: $8,500
Returns: 270%
With the profits and capital available after these 2 trades, I bought 4 LEAPS of Microsoft stock, expiring in June 2023. Mircosoft is my latest strong conviction and I am confident that they will do well in the future. They are like a strong and steady ship (also the most valuable company in the world) that will continue good results due to its large total addressable markets in cloud computing (2nd largest market share), business and personal OS (Windows) and software (MS Office), gaming (Xbox), social media (Linkedln) as well as being a key player in the Metaverse. Microsoft is not overpriced like AMD or Nvidia and the premium is relatively cheaper than its semiconductors counterparts, which translates to a higher return when the share price increases over time.
Learning Investment With Jason Cai 
For AMD, why the option was purchased with a delta of 0.8? and not low delta of 0.2 as per mentioned in your other leap option trade in your other article? What makes you decide which delta to choose when buying a leap call option?
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Great question. I bought AMD with a high delta as I was very bullish on the stock, especially after a fantastic Q2 earnings announcement in late July 21. I wish to do a quick trade but turns out it was quite a risky move AMD price dropped from $120 to $100. Luckily, it bounced up again. I usually buy at a premium I am comfortable with. Maybe 10% of total price. You can read more in this article:
https://learninginvestmentwithjasoncai.com/2021/11/21/what-delta-value-do-i-use-for-my-trades/
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You are making me think about selling my leaps 🙂 thanks for this post…
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My pleasure, Sam. Just to add I still have 7 Nvidia LEAPS and 4 AMD LEAPS left. So, I took profit on these first. Even if I get it wrong and AMD and Nvidia go to the moon by year end, I still have some stakes left. Cheers.
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