Seems like I have fallen into wanting to sell puts rather than buying calls our putting on a call spread. I just don't like shelling out the big bucks to buy stocks. However, I did put on a synthetic long a few days ago.
As I posted, I bought a MU Jun30 32c for 1.17. It is now in the money with MU trading at 32.34, but the option is only worth 1.63 as of now. For me to break even by a week from Fri, MU price has to go up about a dollar from here. If earnings are good that will be easy, but I am not counting on it. So as of now, 1.17 is my floor. Don't want to lose money on the option.
However the put is another issue. I got .93 for selling the 30p and is currently trading for .62, which is really high to my way of thinking. By Monday it will be under .30 and well on it's way to zero.
I really like collecting the put premium and then watching it decay. All I have to worry about it the price of the stock NOT going down. How much it goes up is really of now concern.
But maybe I will get lucky and make some $ on the call also. That was a least my thinking when I put the trade on.
But then as I wrote this I thought maybe I am looking at this all wrong. What I really have done in net is buy a 32call for .24 (1.17-.93). When I look at it this way, with the price at 32.34 my synthetic long is already in the money by .10.
So which is better, colect the .93 and go home or hope for MU to close Jun 30 above 33.17 for my syn long to match what I could have made on just selling a put. Let's see how this trade works out.
I usual I will be watching it daily.
Trade the Charts and not the Heart - Expect the trend to
continue until it doesn't - Realtime is the real deal
