I hold $MU position than ran up pretty nice during last year. I want to hedge.
By the McMillan book I am considering two alternatives:
I sell ITM $480 Calls for $135 with Time Value of $105 (MU is $510)
If the stock runs higher I will be assigned (if I don’t roll), so my ceiling is $615, and it gives me some soft cushion to the downside.
The second strategy – zero cost collar:
I buy $480 Put and sell $610 Call for total of zero dollars . Here my cap is similar $610, and downside is hard.
the hedge expiration in both scenarios is Dec 2026.
What are your thoughts? Any other ideas?
Posted by mshparber