The September 22 setup on Micron Technology (MU) delivered exactly as planned despite the earnings wildcard.
MU had ripped into extreme overbought territory with RSI above 77 and MACD momentum already rolling over from its peak. The rally looked stretched, and even with earnings risk baked in, the 10-delta positioning provided enough cushion for the trade to work.
By Friday’s close, both options expired safely out of the money, capturing the full premium. The semiconductor bounce post-earnings kept MU elevated but never challenged the $195 short strike—exactly the outcome probability favored.
Trade Recap
Structure: Bear Call Spread
Expiration: Sep 26, 2025
Short Call: 195C (10 delta)
Long Call: 200C
Contracts: 19
Credit Received: $0.33
Broker Fees: –$27
Net P/L: +$600
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👉 View in Trade Log
Post-mortem
This trade navigated both technical extremes and binary event risk successfully.
→ RSI stretched above 77 with MACD divergence signaling momentum exhaustion.
→ 10-delta strike selection kept adequate distance despite earnings volatility.
→ MU rallied post-earnings but stayed well below $195, letting time decay complete the work.
The semiconductor sector continues to show strength on domestic manufacturing themes, but elevated RSI readings across the space keep offering attractive premium-selling opportunities. As long as momentum stays overextended, defined-risk spreads at technical extremes remain the core playbook.
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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.