Potential Micron Technology (MU) Trade Targets 7.60% Return
Apr 12, 2019 (Marketintelligencecenter.com via COMTEX) —
MarketIntelligenceCenter.com’s patented algorithms have identified an attractive covered-call trade on Micron Technology (<a href=”http://www.marketintelligencecenter.com/symbol/MU”>MU</a>). Look at the Jun 21, 2019 $42 covered call for a net debit in the $39.03 area.<br /> <br /> This trade has a duration of 70 days. The break-even point of this trade is the same as the net debit, which gives this trade 7.68% downside protection. If the stock closes at or above $42 at expiration this trade will return 7.60% or 39.67% annually (for comparison purposes only). <br /> <br /> If you’re interested in a lower-cost hedged trade on Micron Technology, consider buying the Jan 17, 2020 $20 call and selling the Jun 21, 2019 $42 call for a net debit of $19.75. A<br /> <br /> This hedged trade uses a longer-term bought call instead of the long stock position in a traditional covered call. The hedged trade lasts 70 days and would provide 5.98% downside protection. If Micron Technology is at or above $42 when the market closes in Jun 21, 2019, this trade will make a full return of 11.39% of the initial capital at risk for an annualized return rate of 59.40% (for comparison purposes only).<br /> <br /> MU closed Apr 11, 2019’s trading session at $42.27. In the past year, the stock has hit a 52-week low of $28.39 and 52-week high of $64.66. Micron Technology stock has been showing support around $41.78 and resistance in the $42.97 range. Technical indicators for the stock are bearish and S&P gives MU 3 STARS (out of 5) hold ranking.
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