$AMD · Schwab Network · 2026-11-03

In terms of earnings, AMD is now awaiting the release of its quarterly results. This comes at a time when tech trade is facing a lot of testing. AMD shares fell nearly 18% in October, but are up more than 130% year-to-date.

When it comes to income, expectations are now at this level. Wall Street expects adjusted earnings of $1.94 per share, up 15% from the previous quarter and several times higher than the same period last year.

Revenue is expected to exceed $13.1 billion, which would represent an increase of more than 40% over last year. Everyone will also be watching the revenue coming from data centers.

Revenue from that sector more than doubled to $6.72 billion last quarter.

The stock came under considerable pressure last week. But forecasting the future is key, as you may recall that AMD beat expectations in the last two quarters, yet their share price fell.

I think the statistics they will publish will be quite shocking. Does that mean the share price will increase? I have no idea what the share price will do. However, they will disclose client segment information.

They will also highlight statistics from the data center segment.

I think the PC sales forecast will be very important. They need to explain this number very clearly. So, people look at things together and the PC market is so important to AMD that they need to be clear about what they're doing there. They need to make this clear.

Is there a risk that this stock will be sold? Yes, there is. If they don't show good results, then so be it. So, I think the demand for AI processors will become a key issue. This is the engine of their growth. This is where they derive their growth.

And so, you'll see the fourth quarter guidance in these types of earnings events. Investors don't just want to know what you're doing now. They want to know what the future holds.

They are looking for an acceleration or a slowdown. So, the direction is going to be important.

And their new hardware releases will also be very important. They will talk a lot about this. However, this stock really fluctuates based on earnings. It moved based on Intel's earnings.

So, I hope it will also affect their own income. This should be a big event.

What are the expected movements? What do we have right now? Just below $35, $36. Today it actually went down a few dollars. So, I expect big moves from AMD. This will be a big event.

Well, AMD is taking over the market from Intel on the CPU side for hardware sales, computer sales, right? And they have decreased. The stock fell 11% on Friday, with Intel's share price falling 29%. But this stock is still up 130% this year.

So, if you think they are unlikely to go down, if they give bad direction like Intel. Intel gave bad guidance, right? To move forward. They could not achieve the target in EPS.

They failed to meet their revenue targets. So, there are some concerns.

The stock is down about 25% from its recent high we saw above $658 last month. So, that's a bit of a relief. But you're seeing a jump of more than 5% here.

AMD currently has about 10%. So, these are the things you need to look at. Revenue growth is expected to be around 42%. So, anything can happen in this outcome. Even if it's a good report, the stock could still fall.

If it's a good report, the stock could jump. We just don't know at this point.

This is the kind of segmented sector and individual name that can move significantly after earnings, and we saw that in the case of Intel last Friday. So, my paper money trade is in a bullish or upward position.

I saw the expected move, right? Like I said, around $36. See where the stock is now. Let's assume it's around $490. So, what I saw was an out of the money call vertical, but I'm buying it.

So, looking for that big move, I bought the November 13th one. I gave myself some time and I bought the 500-520 call vertical. I've paid close to eight dollars now and I'm expecting very little.

I'm looking for a move to $490 to $520. If I get that move, it could be about triple that, right? It could actually be 150% on top of that. So, that's what I'm looking for.

I'm not interested in theta or implied volatility. They are there. You can definitely see them. This is just a call vertical. I know my risks in trading. I'm not looking for anything as big as the expected move, just a move towards $520, Tom.

Keeping the fundamentals relatively consistent with this trade, I'm buying 500 puts, selling 520 calls, keeping some time on hand if needed, Tom.

Yes. Weekly options for November 13. So, the example that Kevin gave is not entirely an income example. This is a bullish call vertical of the weekly cycle on November 13, with 10 days left to expiration.

So, as Kevin mentioned, you have some time on your hands, but he's buying a 500 strike call. This is about $8 out of the money on the upside. And to offset some of the costs, I'm selling 520 strike calls.

So, a bullish $20 wide call vertical, which requires a debit of about $7.70. It is trading at a slightly higher price. The stock has moved upward along with the overall market.

However, the debit you are paying will be at your risk. If you pay eight dollars, that's $800. If you pay $7.70, the risk is $770, which brings your break-even point to $507.70.

Now, it's only 3% more than the current share price. So, you need a movement, but only 3%, and as Kevin mentioned, the options market is predicting a movement of about $36 in either direction on this stock in terms of a one-day movement of the stock.

Here, you only need an upward movement of $15 or 3% to break even. It has a good balance of risk and reward for you.

The point is, in Kevin's trade, you need a movement, right? If the stock consolidates here and does not go above 500, its value will continue to decline. You will see that the price is contracting.

You certainly wouldn't want the stock price to drop further, right? That's where you will lose your paid debit on this type of trade. You have a week and a half in this position.

So, if you don't get the desired movement initially, we've seen some movements after the earnings announcement that don't match the pre-market or post-market. So, keep in mind, this is a bullish call vertical, with good potential for risk and profit, but for this type of trade, you need an upward movement above the 507.70 breakeven.

Kevin, I was a little more passive and used an unbalanced call butterfly here, where I'm actually getting credit by buying this call butterfly. I went for the weekly option on November 6th, meaning it had 3 days left until expiration.

I will buy a 530 strike call that is out of the money, meaning about $38 away on the upside. Buy one 530 call, sell two 535 calls, and then buy one 560 call. So, in the case of Unbalanced Call Butterfly, I get $3 credit.

Look, I'm not giving anything because it's out of the money on the upside and I've set it up as a Broken Wing Call Butterfly, where I'll get $3 in credit. What does this mean? Simply put, if the stock is below 530, I can leave $300 of the spread collected on this position.

Now, if the stock rallies and reaches near the 535 strike where I shorted the two options, then the maximum profit you can make from this trade is about $800, and that would be right at the 535 strike.

Kevin, my break even on this trade is the upward movement of $543. That is, it is outside the one standard deviation movement that the options market is predicting. The reason I risked $1,700 on this trade is because I have a high probability of success and I have an additional advantage near the 535 strike, which is about one standard deviation.

Yes, that's right. What Tom did was he matched his short strike with the expected move, you understand? Then, he created his butterfly—let's call it a type of butterfly, because it's a call butterfly with an upward target, but it's trading for credit and it will do well even if the share price goes down.

Why? Because he is in a long position on a $5 call vertically above the market, but he is in a short position on a $25 call vertically above the market. That's where the risk comes in, right?

If the stock goes to $25, if this spread is through short 535-560, then there is a risk of $1,700 there. The good news is, you will earn $500 from the call vertical, $300 from the credit you took, and the rest will be at risk.

So, you're looking for a move towards 535, and that's how you set up these butterflies for credit. The goal is always a short strike. That's where it yields the highest profits.

That's where you start it for credit and stop it for credit. So, that's where it peaks, but the risk is in the upward movement. The risk is limited, but it is on the upside. Tom, always be careful if it doesn't end somewhere in between the strikes.

Yes. And I think the 540 strike is the key. Your break-even is upwards of 543, but the 540 strike has an 80% chance of ending out-of-the-money. So, this is a high-probability trade.

The risk is much higher than your potential profit, but even if you are wrong and the stock rises to 540, you will still make a profit from this trade.