Bear Call Spread – MU
📉 Momentum stretch into short-term exhaustion. Opened January 6.
Micron Technology Inc (MU) extended sharply higher into Tuesday, pushing deep into overbought territory after an already mature uptrend. Price accelerated away from its EMA cluster, RSI reached overbought levels, and the prior session before the breakout already showed a failed bearish attempt — a typical sign of late-stage momentum rather than fresh impulse.
The entry is not a directional bet against MU as a business. It is a short-term volatility and extension fade, targeting the high probability that price does not continue vertically into the end of the week.
This setup relies on one condition only: MU staying below the 370 level through Friday’s expiration.
Trade Structure
Strategy: Bear Call Credit Spread
Expiration: January 9, 2026
Short Call: 370 (10-delta)
Long Call: 380
Contracts: 5
Credit Received: $0.44 per spread
Target Profit: $225 (gross)
Broker Fees: $6 total
👉 View on OptionStrat
👉 View in Trade Log
Context for the Entry
Daily RSI in overbought territory
Price stretched well above EMA-12 and EMA-26
Prior session showed bearish pressure before the final push
Short strike positioned far above current price, requiring continuation — not just strength
The trade does not require a pullback. Consolidation, sideways movement, or even modest continuation below 370 is sufficient.
This is a short-dated, defined-risk setup where theta works immediately and probability is driven by distance, not prediction.
Plan: hold into expiration unless price shows renewed acceleration toward the short strike with expanding volume and momentum.
Framework applied: extension → exhaustion risk → wide buffer → short time → mechanical execution.
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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.