New Options Open for Micron Technology Inc. Ahead of December Expiration

Investors in Micron Technology Inc. (Symbol: MU) gained fresh opportunities today with new options available for the December 27th expiration. Through our YieldBoost formula, Stock Options Channel analyzed the MU options chain to highlight one notable put and call contract.

Put Option: Buying Opportunity at $112.00 Strike

The put contract with a $112.00 strike price currently has a bid of $7.30. Selling this put contract means an investor commits to purchasing the stock at $112.00, while collecting the premium. This brings the effective cost basis to $104.70 per share (excluding broker commissions), offering a potentially appealing alternative to buying shares at the higher current price of $112.79.

The $112.00 strike price reflects a near 1% discount from the current stock trading price, placing it out-of-the-money by that margin. Current data shows a 56% chance that the put contract could expire worthless. Stock Options Channel will continuously track these odds and display the updates on our website under the contract detail page. If the contract does expire worthless, the premium signifies a 6.52% return on the cash commitment or an impressive annualized yield of 47.58%, known as the YieldBoost.

Below is a chart illustrating the trading history of Micron Technology Inc. over the last twelve months, with the $112.00 strike highlighted in green:

Call Option: Potential Returns with $115.00 Strike

On the calls side, the $115.00 strike call contract is currently bid at $7.20. If an investor buys MU shares at $112.79 and sells this call contract as a “covered call,” they agree to sell the stock at $115.00. This could result in an 8.34% total return (excluding dividends) if shares are called away on December 27th (before broker commissions). However, investors should consider potential upside if MU shares rise significantly, making an assessment of the stock’s historical performance and business fundamentals crucial.

Below is a chart showing the trailing twelve month history for Micron Technology Inc., with the $115.00 strike marked in red:

The $115.00 strike represents about a 2% premium to the current stock price, meaning there’s a possibility that this call might expire worthless. Current analysis suggests a 49% chance of that occurring. Stock Options Channel will track these probabilities and update options trading history graphs on our website. Should the covered call expire worthless, the premium would translate to a 6.38% extra return for the investor, amounting to an annualized yield of 46.60%, which we also label as the YieldBoost.

The implied volatility for the put contract stands at 49%, while for the call contract it is at 55%. Analyzing the last 251 trading days and today’s price of $112.79, the actual trailing twelve month volatility is computed at 47%. For further options contract ideas, please visit StockOptionsChannel.com.

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.