10/30/2022 Plan:
This week we look at Texas Instruments (Ticker: TXN) and go back to Micron (Ticker: MU)
10/30/2022 Plan (continued):
- TXN – Sell Dec 2 145/140 put spread for 0.53
- MU – Sell Dec 2 47/42 put spread for 0.55 OR
- MU – Sell Dec 2 46/41 put spread for 0.45
- Prices are as of market close 10/28/2022, actual fill and strikes may differ depending on Monday’s open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
10/30/2022 Commentary:
This is two trades both in similar industries, so keep that in mind from a sizing/exposure perspective. Choosing one or the other for smaller accounts is probably best.
The Micron trade is below the recent low and the TXN trade is pretty close to the July low.
Two different options (sorry) for the MU trade. A bit less premium with the latter, but higher probability of expiring worthless. Choose accordingly. I’ll lean on the 46/41 spread if available for 0.45 or higher as I won’t have as much time to manage the trade.
Feel free to Reach out with questions on this or anything else!
10/31/2022 Entry:
Sold MU Dec 2 47/42 put spreads for 0.51
Sold TXN Dec 2 145/140 put spread for 0.56
Given the similarity in the names (industry overlap) be mindful of your size/exposure.
11/5/2022 Update:
The MU put spreads can be closed for 0.27, which is a $24 profit per put spread. I intend to leave them on longer to try and increase the profit. MU is above $56, so we have $9 between the current stock price and the short strike.
The TXN put spreads can be closed for 0.39, a profit of $17 per put spread. I’m holding these as well. We have over $17 of buffer between the short strike and the current price.
11/12/2022 Update:
With the large move up last week, the MU put spreads can be closed for 0.05. For most, I’d suggest just booking the win and moving on to the next trade. There are still 3 weeks left in the trade, a long time to wait for a nickel.
Similarly for TXN, the put spreads are down to 0.05. I plan to just close them and book the win rather than waiting 3 weeks – market volatility is high and while it is unlikely, seeing these put spreads turn into a loser would be sad.
11/14/2022 Close:
The MU put spreads were closed for 0.04, for a $47 profit per put spread sold. With so much time left on the trade, I prefer to take the win and re-allocate capital to other trades. Waiting for three weeks to pick up $4 isn’t a great ROI. Plus there is always the chance the market moves against us and we end up losing, which would be no fun.
Similar to the MU put spreads, we closed the TXN put spreads for 0.04. The profit per spread was $52 on these. A nice win in just a couple weeks.
