Dmceng4....if you bought the stock at the closing price today at 76.80... the calculations would be as follows:.... a june 18 covered call at the 85 about 8 dollars away from the strike price....85 dollar strike would bring in 1.39 dollars per share for about 1 month away... so 1.39x 12 months would be 16.68 dollars for 0ne year if you rolled out that call for 12 time periods at the 85 dollar strike.... 16.68/76.80=21.8 % on an annualized basis.....if you bought the stock at 85 dollars, the calculation would be 16.68/85=19.6% return on an annualized basis...the return on selling the call if you paid todays closing price is a little light for a high momo stock, and you risk losing it as it is only....85-76.80=8.20 cushion, plus 1.39, or 8.20 plus 1.39=9.59...so , if the stock reaches 86.39, it would be called away...I would say, that since the overall market is correcting, MU could have a hard time reaching the 86.39 in one month, so the covered call might be safe to do....however, the general rule is if the stock is a rapid mover, you would want at least a 30 % annualized return to sell covered calls........Lodas
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