Structured research and source timestamps available.
Watch full video ↗The speaker believes that Micron has already reached a top and is now on the backside of the move. The strategy involves selling an out-of-the-money put spread to collect premiums while being prepared for a potential retracement. The speaker emphasizes the importance of considering the backside of a move, where the market may correct after an overextended rally.
The speaker suggests a trade strategy based on the price action of Micron, identifying a swing low at 640. By selling the 640 strike and buying the 630s, the trader can capture a 223 credit. The strategy also involves buying the 680s and 690s to capture a potential bounce after a pullback. The max loss is around 678, and the break-even point is around 688. The trade is considered attractive due to the defined risk and reward parameters, with a focus on capturing a portion of the price range.
The speaker suggests that memory stocks like Micron and SanDisk have experienced significant gains and may be overbought, leading to a potential retracement. The strategy involves selling out-of-the-money put spreads to collect premiums while being cautious of the market's potential reversal. The speaker emphasizes the importance of considering the backside of a move, where the market may correct after an overextended rally.
The speaker suggests using price action analysis to identify potential trade setups, particularly focusing on swing lows and chart patterns. By pairing these observations with options strategies, such as selling lower strike prices and buying higher ones, the trader can create a structured trade with defined risk and reward parameters. The strategy emphasizes capturing a portion of the price range with a defined stop-loss and profit target, while also considering the potential for a bounce after a pullback.
The speaker mentions that the expected move for Micron is not explicitly stated, but the strategy involves selling an out-of-the-money put spread to collect premiums while being cautious of the market's potential reversal.
TakeawayThe speaker's strategy for Micron involves selling an out-of-the-money put spread to collect premiums while being cautious of the market's potential reversal.
The speaker expects a pullback after a move to the downside, which could provide an opportunity to capture a bounce. The pullback is anticipated to occur as the price consolidates or slides lower.
TakeawayThe speaker suggests that a pullback may occur as the price consolidates or slides lower, providing an opportunity to capture a bounce.