I got into Micron (MU) a few week ago right before they announced their earnings. It wasn’t a normal move for me but I liked the way the charts looked and there was a few upgrades. On Oct 3rd I bought I bought 5000 shares and did a “Triple Play Hedge.” All three of the Calls I sold expired and I’m still holding the stock. I bought the shares at $17.78. The shares came down a little in the last few weeks which is the reason I still own the stock. All my Calls in my Triple Play Hedge expired and I wasn’t assigned. Today the stock is up and it went over $17.40. It’s getting close to my purchase price so I sold another 50 contract Call against the shares. I hope I get assigned this time! For an investor, I like Micron. For a swing trader, like myself, I really don’t like Micron. It’s a slow moving stock and the premiums do not fit into my strategy. For a buy-and-hold investor, Micron is a great position to hold. It moves slow and it moves up!
Even with the stock only $.30 below where I bought I couldn’t get a good 1 week premium. This Call I just sold, I went out to next Friday, Oct. 28th. I sold 50 contracts of MU 10/28/16 $18 Calls and received a premium of $.20 for $1000. This is a Covered Call on previously owned stock so this trade gets a Risk Factor of 1. This is a very low risk trade. Here’s the order:
Sell to Open 50 MU 10/28/16 $18 C @ $.20 (+$1000)
I hope MU moves up over $18 by next Friday and I get assigned. This would give me another nice premium in addition to the 3 premiums I already received from my Triple Play Hedge. Plus I would make another $.22 on the stock. If I don’t get assigned I’ll continue to sell Calls on my 5000 shares.
Steve
The Options Coach