For stock like MU, after its earning, you have two ways to invest
1:) Commit to this uptrend supported by HBM demand, and commit your fund (whatever dollar amount you want to invest) asap and ride the wave towards 400. This gives you max profit of 60%, from 250 to 400. The downside to this approach is sizable drawdown if market as a whole tanks in the near term
2:) you can commit 1/3 or 1/4 of the fund initially and buy after earning. You can then sell additional put when MU makes daily pullback. This helps you to reduce your average cost if MU starts to go down immediately, and also helps you to "accumulate" premium if price goes up immediately
For MU, I used the 2nd approach. Bought initial position with 1/4 of the fund at 249, then sold Feb 250 and 260 put as MU run up (they can be sold for $20 to $25). Collectively, accumulated $40 ish premium against my initial position but with the understanding that if MU drops significantly, I will need to buy those shares at a roughly 230 price range
In reality, MU continued to run up. On Friday, I sold Feb 320 call and had to roll it to March 340 call. But the net result is now I have another $23-$24 premiums from the cc. Combine this with put premium, the total is roughly 60 ish premium on hands
in next 2 month, if MU continues to go up and up, the initial position will eventually be assigned at 340, plus those premiums, for roughly 400 price point. Not a bad investment in 2 months. The downside is still that investment size is only 1/4 of the fund
if MU starts to pullback from here, that $60 premium can act as a significant buffer to reduce the drawdown. And if MU really crashes with the market, I may be able to get additional shares assigned at an entry price less than 210
