Tech Alert - (MU) February 12, 2024 - TAKE PROFITS

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) – TAKE PROFITS

SELL Micron Technology, Inc. (MU) February 2024 $77.50-$82.50 in-the-money vertical BULL CALL spread at $4.85

Closing Trade

2-12-2024

expiration date: February 16, 2024

Portfolio weighting: 10%

Number of Contracts = 23 contracts

I am taking profits on the Micron in-the-money bull call spread at $4.85.

Micron has hung in there and the price action wasn’t brilliant, but just enough to get us there before the February expiration.

With this nice little move up this morning, it’s not worth holding it to the end of expiration on Friday, and better to take profits and roll the proceeds into a better tech trade.

Micron is another chip company at the heart of generative AI infrastructure and I was inclined on a dip of over 2% to execute a bull call spread on MU.

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 went with MU and it paid off in the short-term.

Like I thought, we heard many positive things about the revenue estimates for AI chips in 2024 during the earnings season.

High-quality chip stocks are solid buy-the-dip candidates.

Here are the specific trades you need to exit this position:

Sell to Close 23 February 2024 (MU) $77.50 calls at……..……$9.20

Buy to Close 23 February 2024 (MU) $82.50 calls at………….$4.35

Net Proceeds:……………………..…….………..…….......................$4.85

Profit: $4.85 - $4.30 = $0.55

(23 X 100 X $0.55) = $1,265 or 12.80%

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.

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