$100K Account: MU Assigned. Sell May $100 Covered call

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The Trade at a Glance

  • Account Size: $100K
  • Underlying Stock: Micron Technology Inc. ($MU)
  • Shares Held: 100 @ $95 (assigned from prior put)
  • Strategy: Sell 1 Covered Call
  • Expiration: May 16
  • Strike Price: $100
  • Premium Collected: $47

Key Metrics

  • Max Profit: $47 premium + up to $5/share capital gain if called away ($95 → $100)
  • Break‑Even on Shares: $95 – $0.47 = $94.53
  • Upside Capped: Above $100 the stock is called, locking in gains.

Why This Trade Makes Sense

  1. Instant Income – The covered call drops our effective cost basis below $95 and yields immediate cash.
  2. Defined Exit – Will happily exit at $100 (+5.5% in share appreciation) while pocketing the premium.
  3. Volatility Harvest – MU’s option premiums remain attractive; harvesting theta while we own the shares.

Risk Management

  • If MU surges, consider rolling up/out to keep upside participation.
  • If MU drifts lower, keep the premium and write another call next cycle.
  • Comfortable holding MU long‑term given fundamentals in memory‑chip cycle.

Final Thoughts

Covered calls convert static stock positions into yield engines. This MU move captures premium, sets a target exit, and keeps our capital working.

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