MU Analysis

Micron Technology Inc. (MU)

Update 6/30/2017: MU fell sharply after earnings were published. I exited for a profit at 41.8% of maximum potential profit.

Shares rose by 1.6% over my one-day holding period, or a +567% annual rate. The options position produced a 71.7% yield on debit for a +26,173% annual rae.

MU publishes earnings on Thursday after the closing bell.

I shall use options that trade for the last time eight days hence, on July 7.

Implied volatility stands at 31%, which is 5.3 times the VIX, a measure of the volatility of the S&P 500 index.

MU’s IV stands in the peak of both its annual range and  its most recent broad movement.

The price used for analysis was $31.24.

Premium: $3.52 Expire OTM  
MU-iron fly Strike Odds Delta
Long 38.00 93.4% 9
Break-even 34.52
Short 31.00 51.2 55
Short 31.00 48.7% 45
Break-even 27.52
Long 24.00 90.9% 6

The premium is 50% of the width of the position’s wings.

The risk/reward ratio is 1:1.

Decision for My Account

I have entered an order on MU as described above. The stock at the time of entry was priced at $31.24.

By Tim Bovee, Portland, Oregon, June 29, 2017


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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