Trade Alert - (MU) June 6, 2024

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) June 2024 $117-$122 in-the-money vertical BULL CALL spread at $4.20

Opening Trade

6-6-2024

expiration date: June 21, 2024

Portfolio weighting: 10%

Number of Contracts = 24 contracts

Micron is another chip company at the heart of generative AI infrastructure and I am inclined on this dip of over 2.5% to execute a bull call spread on MU.

This is a bet in the next 15 days that MU won’t drop lower than $122.

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.

Chip stocks are even doing better than software stocks lately.

I am going with MU in the short term and as we exit earnings season, I believe we should hear many positive things coming up about AI chips in 2024.

This chip stock is a solid buy-the-dip candidate.

Don’t pay more than $4.30.

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

Buy to Open 24 June 2024 (MU) $117 calls at…………$13.90

Sell to Short 24 June 2024 (MU) $122 calls at………….$9.70

Net Cost:………………....……..…….………..……................$4.20

Potential Profit: $5 - $4.20 = $0.80

(24 X 100 X $0.80) = $1,920 or 19.05% in 15 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 on “How to Execute a Vertical Bull Call Spread” by clicking here at
https://www.madhedgefundtrader.com/ltt-vbpds/

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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