Technology and Treasuries
Yesterday was not a good day. Not for the markets and not for me. My woes had to do with food poisoning (rather than what I thought was the flu). But just as this may be a short-term trading opportunity for the market, yesterday helped me with a quick weight-loss program. Still, I'd probably recommend using Weight Watchers (WTW) over yesterday's approach.
As for stocks, both Micron Technology (MU) and Motoricity (MOTR) look putrid. Following on my put-selling thesis from Monday, I think there are plays to consider on both. For a trader who is simply looking to get into MU at a much lower price, yet still make a decent return on cash if the stock stays flat, then the October 3 puts were an attractive sell this morning. Another more conservative approach would be to sell three October 3 puts and buy one October 4 put when they are at no cost. With the stock jumping around today, I'm not sure how long it will be like this. My preference is to buy the November 4 put and sell three November 3 puts in a 5x15 ratio for about $25 to $35 net (taking commissions into account). I still take in a small net credit, but now my break-even point is pushed slightly below $2.50. Also, I stand to make a nice profit if MU heads below $4, but stays above $3 come November expiration....294 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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