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 2024 $77.50-$82.50 in-the-money vertical BULL CALL spread at $4.30
Opening Trade
1-23-2024
expiration date: February 16, 2024
Portfolio weighting: 10%
Number of Contracts = 23 contracts
Micron is another chip company at the heart of generative AI infrastructure and I am inclined on this dip of over 2% to execute a bull call spread on MU.
This is a bet in the next 24 days that MU won’t drop lower than $82.50.
There is ample demand for AI chips and playing this through one of the names like AMD or Nvidia is something that would make sense.
I am going with MU in the short-term and as we enter earnings season, I believe we should hear many positive things about the revenue estimates for AI chips in 2024.
At worst, these stocks are solid buy the dip candidates.
Don’t pay more than $4.42.
Here are the specific trades you need to execute this position:
Buy to Open 23 February 2024 (MU) $77.50 calls at………….………$10.25
Sell to short 23 February 2024 (MU) 82.50 calls at……...........…….$5.95
Net Cost:………………..................................……..…….………..…….....$4.30
Potential Profit: $5 - $4.30 = $0.70
(23 X 100 X $0.70) = $1,610 or 16.28% in 24 days
If you are uncertain about 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.