MU/Batman - $93Bn at $84 with $6bm coming in is very reasonable - especially since they tend to go between $6Bn and $12Bn depending on where they are in the cycle - so this is low. We don't have MU in the LTP for some reason (I think we had it and cashed out) so let's add it with a watch trade - a small allocation we're happy to DD on if they crash for some reason. $40 held even in the crash (briefly below) and we can offer to be long 1,000 at $60 selling the 2023 $60 puts for $5.10:
So, for the LTP, let's:
- Sell 10 MU 2023 $60 puts for $5.10 ($5,100)
- Buy 15 MU 2023 $75 calls for $21 ($31,500)
- Sell 15 MU 2023 $90 calls for $14.20 ($21,300)
That's net $5,100 on the $22,500 spread so $17,400 (341%) upside potential at $90 but we'd hate it if that happens. Ideally, MU drops 20% to $70 and we sell 10 $50 puts for more than $5 and then we're in a net $0 spread where our worst case is owning 2,000 shares at an average of $55 and THEN we sell more calls and stuff.
Meanwhile, with 15 longs, we can sell 5 short calls when they get toppy (not now). At the moment, the Sept $90s are $3.60 so 5 of those would generate $1,800 selling 79 of our 569 days. 6 more sales like that would be $10,800 of bonus income while we wait.
