Micron Technology (MU) has ripped higher into overbought territory, with RSI stretched above 77 and MACD momentum rolling over from its peak. The rally has carried far, leaving price extended and vulnerable to even a modest pause.
📉 Vertical move into extremes. Signs of exhaustion emerging.
Setup Selection
The daily chart shows MU accelerating sharply into overbought readings. RSI confirms overheating, while MACD has already begun to cool, signaling momentum loss.
My entry is anchored to the system rule: sell at the 10-delta strike. The $195 short strike sat well above spot at entry, with the $200 hedge providing defined protection. Implied volatility remains elevated, helping to keep risk/reward favorable.
⚠️ One caveat: earnings are scheduled for September 23 after market close, with an expected move of ±9%. That injects lottery-like risk into the setup — but the position was already on, so I’ll let it play out.
Why Bear Call Spread?
→ Defined risk, capped exposure
→ Entry strictly at 10-delta strike
→ Profits if MU stalls, consolidates, or even retraces slightly
The setup doesn’t require a sharp reversal — only that MU fails to rip further through fresh highs.
Trade Structure
Expiration: September 26, 2025
Short Call: 195 (10-delta)
Long Call: 200
Contracts: 19
Credit Received: $0.33 per contract (net after spread)
Target Profit (net before fees): $627
👉 View on OptionStrat
👉 View in Trade Log
Entry and Exit Plan
Position opened Monday, September 22, at the 10-delta strike.
→ If MU stays below $195 and the bulk of the premium decays before Friday, I’ll look to exit early rather than hold into expiration.
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Disclaimer
All content is for informational purposes only and does not constitute financial advice.Any trades or strategies should be tested in a simulated environment before use.Trading involves risk, and all decisions are the sole responsibility of the reader.