Option Strategies: MU& ACN
Hello everyone! Today i want to share some option strategies with you!
1.
Not much earnings trades going on for this week. We are targeting $Micron Technology(MU)$ $Accenture PLC(ACN)$ .
For MU, we are going to go long and sell covered calls to pay for puts to hedge our longs. Will post that trade idea separately.
2.
Pre-earnings trade idea on $Micron Technology(MU)$ we are considering. This trade is a defined risk trade with capped profit meant to reduce risk exposure yet still be profitable.
Earnings date: Sept 25 after market close
Expected move: ~9%
Trade idea:
▫️ Buy shares of MU
▫️ Buy at-the-money puts to hedge against long position (shares)
▫️ Sell out-the-money covered calls at the furthest strike away that pays enough premium to cover the cost of the puts
Points to consider:
▫️ There are a lot of FinTwit posts out there analyzing the technical chart set-up ... we won't get into it since you can research it for yourself, but the set-up and R/R looks good to initiate a speculative long
▫️ Strong volume support at the 87 level and then further down around the 70 level
▫️ Volume resistance at most recent high around 109/110
▫️ If MU dumps for earnings, then the puts will hedge our loss on the shares
▫️ If MU pumps for earnings, then our potential profit will be capped by the covered calls
Note: Expected move and S/R levels could change based on trading action this week
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