The market was in a selloff on 17 July, especially the chip companies, so I exited some of my positions in the chip companies that I owned.
[17 July 24] +USD196 Profits, Closed AMD CC CALL
I closed my AMD Covered CALL which I sold (opened) just one day ago. I had wanted to sell AMD shares when the stock was trading at USD175 but changed my mind and felt that maybe selling Covered CALL was better, to ensure that I remained profitable even if the stock rebounded.
So, instead of selling my 100 AMD shares for USD175 each, I decided to sell a Covered CALL contract with 9 days to expiration and with a strike price of USD185. I thought that since I was willing to sell at USD175, I might as well sell a Covered CALL contract which would be win-win for me, i.e. if AMD continued to rise, I would be happy to sell USD185 and still earn the premium. If AMD dropped, then I would keep the premium.
However, I did not expect AMD to have a huge 8% drop on 17 July 24, as it meant that while I was able to close my contract quickly to capture most of the gains (close to USD200), I lost in value of the shares (-USD1.3k). I eventually still sold at USD162 as things were not looking good for AMD. My average price for AMD was USD155, so selling at USD162, I still gained USD700 in realised profit. It seemed to be a good decision as AMD continued to drop below my average price in subsequent sessions.
I used the free up capital from the sale of 100 AMD shares to buy into Nvidia shares as it was also dropping. Nvidia is the strongest stock leading the AI revolution so I think it has more upside potential as compared to AMD. I bought 70 shares of Nvidia at USD118 each to make up a total of 1700 shares on my portfolio, of which 1500 shares are on Covered CALL contracts. I also sold away my 3 Microstrategy shares for a profit of USD431.
More info on the trades made on 17 July can be found on my Patreon page:
[17 July 24] +USD1,131 Profits, Sold AMD Shares, MSTR Shares and Bought Nvidia Shares
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