When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Tech Alert - Micron Technology, Inc. (MU) – BUY
BUY Micron Technology, Inc. (MU) February 2021 $65-$70 in-the-money vertical BULL CALL spread at $4.22
Opening Trade
1-12-2021
expiration date: February 19, 2021
Portfolio weighting: 10%
Number of Contracts = 23 contracts
Micron (MU) is a 5G play and this is a trade that the underlying stock will stay above $70 by February 19th expiration.
2021 could turn out to be a blockbuster year for Micron's mobile business as sales of 5G smartphones are expected to explode.
The chipmaker estimates that 500 million 5G smartphones could be consumed in the new year as compared to 200 million units in 2020.
Micron is strategically placed to take advantage of this accelerating growth.
Micron CEO Sanjay Mehrotra boasted that Micron “achieved a record number of design wins in fiscal Q4.”
Micron is poised to win in the 5G era as a supplier to all the major smartphone manufacturers, with an outstanding portfolio of industry-leading low power DRAM and managed NAND solutions.
If you do not trade options, pass on this trade.
Here are the specific trades you need to execute this position:
Buy 23 February 2021 (MU) $65 calls at…………..………$14.37
Sell short 23 February 2021 (MU) $70 calls at………….$10.15
Net Cost:……………………..…................….………..…….....$4.22
Potential Profit: $5 - $4.22 = $.78
(23 X 100 X $.78) = $1,794 or 18.48% in 39 days.
To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.
If you are uncertain on how to execute an options spread, please watch my training video by clicking here.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.
Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
