In the LTP, we sold 10 MU 2026 $80 puts for $14 ($14,000) and now we’ll take advantage of the excitement (+17.5%) and initiate a full position where we can sell good premiums:
- Buy 20 MU 2027 $90 calls for $44 ($88,000)
- Sell 20 MU 2027 $125 calls at $29 ($58,000)
- Sell 10 MU 2027 $100 puts at $20 ($20,000)
- Sell 7 MU Jan $115 calls at $10.75 ($7,525)
That’s net $2,475 on the $70,000 spread that’s mostly in the money so we have $67,575 ($2,728%) upside potential and we have 8 quarters to sell $7,000 worth of premium – that’s another potential $56,000 we can make along the way and 7 short calls are not likely to hurt us and, if they do, we’re happy to buy more longs as ours go too far in the money.
