ADM - Archer Daniels Midland Co. is one of world's major traders in agricultural commodities. It's a stable company with good valuation and solid dividends not like some tech high flyers with outrageous P/S, propelled to the upside mostly by hype, short squeezes and institutional buying.
Also, what I like about AMD it's high liquidity of options.
On 05/07/2020, Thursday, I went long on May 22nd $36.5 strike call options with average price $40 per contract after I realized that this stock short term oversold below $35 and is ready to bounce to the upside and hopefully start it's bull run toward ex-dividend date which is on 5/19/2020 .
My risk is pretty low and limited, even if I will be wrong with my prediction, but if I am right, reward could be substantial in range of 100-300 % or even more, if ADM "decides" to go on "rocket ride" for some reason, like interest from institutional buyers ...?
Screen shot from bigcharts.com
On Friday AMD spiked 4.69% and May 22nd @ $36.5 call options at closing were trading around $67-70 per contract.....I am pretty sure that on Monday this mini trend will continue unless there is some substantial sale in overall market
ReplyDeleteAround 11 am , ADM went down to $35.10, I was thinking about adding to my long position on May22 calls @36.5 at $22 per contract, but by the time I convinced myself to "pull trigger" prices went up and I gave up on chasing it, So I am still long at $40 per contract
ReplyDeleteToday ADM stock closed at 35.43 on low volume, Option Call May 22nd @ $36.5 is in negative territory .....
ReplyDeleteOn Friday 15th ADM closed at $34.12, it was kind of stressful watching ADM going down for last couple of days, but I noticed that May 22nds @ $36.5 call contracts were trading below $10, so I added to my position to average my cost per contract down to $24.5, that is $245 for 10 options.....It's a gamble, but I suspect there might be short squeeze on Monday and Tuesday for ex-dividend day on May 19th and ADM should jump couple of points to the upside so, I am going to have a chance to unload these contracts in the green....unless, the whole market decides to go south and drag ADM with it........if that's the case, this is going to be a lesson worth $245 bucks :/
ReplyDeleteI THE END, I LOST MONEY ON ADM, MY LONG CALL CONTRACTS EXPIRED WORTHLESS, may be next time...:(
ReplyDeleteMy timing was off on ADM, it closed on Friday 6/5/2020 at 42.52 .....good think is that only risked about 5% of my money....
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