Trading Horizontal Channels
I'm of the mind that MU trades in a horizontal channel between 50 and 61 for several months.
Therefore I sold all my shares several days ago (as a result of Covered Call trades in two accounts). I always like it when the options market pays me to do something.
My intent is to not own shares when price is in the bottom of the channel mentioned above (unless they are assigned to me, which I will encourage when I want that to happen). I only want to own shares when price is within the top half of that channel (at which time I will sell Calls against those shares).
In that way I can sell Covered Calls multiple times during each week when price is in the upper half of the channel mentioned above, then choose a strike that encourages assignment as price goes down (as I've already done several days ago to get out of the shares and into cash), then sell Cash-covered Puts in the bottom half of the channel. (Puts sold in an IRA account must be covered by cash.)
IMO, the purchase of options is where all the risk is, whereas selling options is easy peasy if you don't mind owning the underlying. MU isn't the kind of stock that could crash and make life miserable for a Put seller.
Last week only had four trading days yet it was easy to sell a batch of Puts high, buy cheap to close on a later day, then sell another batch of Puts that expired worthless before the four days were up.
This week, same process and have sold puts twice for a net income this week of $1.19 so far. Might be able to get in a third trade per account since there's a full week. Friday mornings are often a good time to do that as there is often a rush by traders and options can often be mispriced. As I see it, the only risk in selling MU Puts is that I might be forced into owning the stock. I would say, "thank you", then immediately sell overhead Calls.
