Cycle Trading

[Duma]

Remember when I posted the trade display of some MU options to JLS yday. What a difference a day can make with an almost 3% gain in MU.

I originally paid .52 for a Jul14 31 call. It went as low as .13 on Thur of last week, but closed today at .62. MU closed at 31.37, so I am only .37 in the money, the rest .25 in time value. It is going to be a real race to see if MU can continue going up faster than the decay. I will have to watch this very close tomorrow.

At the same time I sold a Jul14 30.5 Put for .83 and actually was willing to let the shares be put to me even as MU was hitting a bottom of 29.75 and the price of this Put reached .99. But 2 trading days later looky looky, it is now trading at .13. I would say at this point, this option will expire and I will get to keep the whole $83.

Selling a put and buying a call is called a synthetic long since I am using the cash from the put sale to cover part or all of the cost of buying a call. I did it short term, so not much chance of the call really making much money unless the stock really soars. Today was a good start. But if it doesn't, I am happy with the Put preimum I will get to keep and whatever I can salvage out of the current .62 call value. Since I paid .52 that will probable be my default sell point.