MU/Albo - Yes, it's in the LTP as a recent add and still playable:
| Long Call | 2020 17-JAN 40.00 CALL [MU @ $41.89 $-0.58] | 20 | 8/17/2018 | (459) | $26,000 | $13.00 | $-3.53 | $13.00 | $9.48 | $-0.13 | $-7,050 | -27.1% | $18,950 | ||
| Short Call | 2020 17-JAN 55.00 CALL [MU @ $41.89 $-0.58] | -20 | 8/17/2018 | (459) | $-10,000 | $5.00 | $-0.75 | $4.25 | $-0.20 | $1,500 | 15.0% | $-8,500 | |||
| Short Put | 2020 17-JAN 42.00 PUT [MU @ $41.89 $-0.58] | -15 | 8/17/2018 | (459) | $-7,500 | $5.00 | $2.00 | $7.00 | $0.10 | $-3,000 | -40.0% | $-10,500 |
Of course now we'll want to adjust it and 2021s are out so we'll probably roll the 2020 $40s at $9.50 ($19,000) to the 2021 $35s at $15 ($30,000) picking up $10,000 of intrinsic value plus a year for $11,000. The short Jan $55s are still $4, so no way I'd buy them back and the short $42 puts are $7 and the 2020 $38 puts are $7 but still plenty of one-year premium in the 2020 puts, so no reason to change those either.
As a new trade for the OOP, I want to take advantage of the short 2020 $55s at $4.50 so:
- Sell 10 2020 $55 calls for $4.50 ($4,500)
- Buy 20 2021 $45 ($11)/$60 ($6.50) bull call spreads at $4.50 ($9,000)
- Sell 10 2020 $35 puts for $5.50 ($5,500)
So we're starting this trade with a $1,000 credit and you have $31,000 upside potential if all goes well. If MU goes higher, you're well-covered and can begin buying back short calls. At $45, let's say they gain all $3 of the move and you buy back 3 for $7.50 - that's just $2,250 so you're in for $1,250 net and now triple-covered on the longs. At $50 you buy back 3 more for $12.50 and that's $3,750 and you'd be then in the $30,000 spread for $5,000 with 4 short calls left against you.
