Invest with Henry 对 $MU 的判断变化

I'm going to be using Micron technology, by the way, in this video. That's why we saw here it says LEAPS and it says Micron. Okay, I'm going to show you Micron. I'm going to show you an interesting chart.

Now, not every stock is worth selling leap options on. Honestly, like if you look at Micron Technology, I'll show you why I'm comfortable with it despite me never really mentioning Micron Technology on this YouTube channel.

So, you know, we'll talk about Micron Technology because that's more exciting for you guys here on the YouTube. So here we're going to talk about interesting and fun, Micron.

So, here's Micron. If you sell a put option, you can see here sell put. And if you go out significantly far, you know, June 2027, 302 days out. Okay, that gives you a lot of time. And this option is going to have more premium than 121 days.

Micron has high. So, check this out. 500 strike price. That is so far away from the current price. That's almost half off. That's like literally we're almost at half off territory. Pretty insane. Very insane to be honest. To be clear, this is almost half off of where the stock is trading at.

Micron Technology, it's not even a stock that I've really talked about too much on this channel. It's not a stock that I love, but very clearly you can see how you don't have to be an expert or to follow lots of news outlets or YouTube videos or even do a lot of research.

I do like Micron and at $500 per share, great. Amazing. I don't have to second guess, hey, the P ratio is low, but maybe this stock has some tough times ahead or maybe things are priced in.

So again, that's that's pretty much half of the real cost of where Micron is trading at. So, here's kind of like what this actually looks like and what I'll be doing. So most people buy them. Well, you can also sell them. Okay? Okay, that's the simple most straightforward story to what investors can start doing to collect upfront income when you sell a LEAP option. It's just selling a put option. Very, very similar. Okay, so I'll show you what selling a put option looks like.

So, leverage is not free. Whenever you sell options, there's obviously risk involved. So, I want to get that out of the way. And I'm not a financial adviser, but leverage is not free. Okay, so any option is going to provide or be utilizing some form of leverage. And in this case, when we sell leap option, you will see how this uh strategy is a lot more capital efficient. Okay, that's the key term, capital efficiency, because you're going to be putting up uh a little bit less capital than it would take to buy 100 shares.

So, here's kind of the example. And this price might change a little bit because took me several days to make this presentation. Took me some good time, but um if you go out to January 2028, which is a lot of time, I get it. Not a lot of us want to sit in our hands.

So if you look at something longer term like January 2028, the further out that you go, the more the market will pay you to wait, which is actually pretty nice because you're getting paid to wait.

So, check this out. 500 strike price. That is so far away from the current price. That's almost half off. That's like literally we're almost at half off territory. Pretty insane. Very insane to be honest. To be clear, this is almost half off of where the stock is trading at. And when you take into account the premium, it basically is, right? Cuz we have a $500 strike price here. But here, the bid and ask, you know, 60, let's just call it 60 and change. Okay? So when you actually factor in the amount that you get paid here in premium, the premium is $6,000. Okay, it's $60 per contract or $6,000. Okay, so that actually creates a break even price that is far below 500. The break even price is far below 500. So instead of being 500, okay, this is going to be 500US 60, which is 440. And 440 is is less than half of the stock price at the moment. So, less than half. That's a 50% discount. I mean, how insane is this?

So, here's what um here's what I kind of just showed and what I just did. It's just one contract, one strike price, one date, which is very very long-term. January 2028, 500 strike price. So here we have the range of possibilities. 938 is today's price. We have multiple different prices that the stock could end up at. Strike price of 500. Okay, we get $6,000 of profit. And our break even is $439. Now it can land anywhere here and if it ends here it'll expire worthless. So we saw the current price today is you know 938. Okay so this is the range of possibilities right you can see here it could end up anywhere here right I mean the stock could go up to,100 it could go down and crash down to 400. I mean it could go less than that but this is kind of the range of possibilities here. Okay. Now it has to fall a long way to reach the break even and actually has a long way to just reach the strike price. So if it falls 47% it'll reach the strike of $500. Okay. But even more interesting is we have a $60, you know, per contract. And I just took the bid price. It's actually going to be higher than 6,000. But we're just going to use the bid which is $6,000 and $6,65 to be exact. All right. So that is the amount that we would collect in premium and that is paid upfront to us. So that actually makes a break even price of you know the $500 and then we go all the way down to $439. Right? So that is now our new break even. So that is the cost if you get put the stock. Okay? If it's at 500 below you will get put the stock in 2028 which is long long long way but your break even is 439. So again, that's that's pretty much half of the real cost of where Micron is trading at. we have the range of possibilities. 938 is today's price. We have multiple different prices that the stock could end up at. Strike price of 500. Okay, we get $6,000 of profit. And our break even is $439. Now it can land anywhere here and if it ends here it'll expire worthless. All right. So what you saw there was super super fast but let's go step by step here and let me just show you what it looks like. So we saw the current price today is you know 938. Okay so this is the range of possibilities right you can see here it could end up anywhere here right I mean the stock could go up to,100 it could go down and crash down to 400. I mean it could go less than that but this is kind of the range of possibilities here. Okay. Now it has to fall a long way to reach the break even and actually has a long way to just reach the strike price. So if it falls 47% it'll reach the strike of $500. Okay. But even more interesting is we have a $60, you know, per contract. And I just took the bid price. It's actually going to be higher than 6,000. But we're just going to use the bid which is $6,000 and $6,65 to be exact. All right. So that is the amount that we would collect in premium and that is paid upfront to us. So that actually makes a break even price of you know the $500 and then we go all the way down to $439. Right? So that is now our new break even. So that is the cost if you get put the stock. Okay? If it's at 500 below you will get put the stock in 2028 which is long long long way but your break even is 439. So again, that's that's pretty much half of the real cost of where Micron is trading at. And then if it falls anywhere here, anywhere above the strike price, you won't get assigned and you're in the green zone actually anywhere above the break even. Okay, so now you understand that full short clip that we uh we went over. Okay, that's how it works. Everything up here in that green line zone is it expires worthless. Okay, it expires completely worthless. And then in between this green dot and red dot, it will start to basically the $6,000 that you made, it'll start to be somewhere in between. So if it's in in the halfway mark, well then you're you're um going to only make $3,000, right? You're only going to make 3K. And if you get to your break even, you make nothing pretty much. You don't make anything and you will get a sign. Okay? And then anything below here, you're actually running at a negative. Okay? You're running at a negative anywhere below the break even of 43935. Okay? So, um, that's kind of like how this whole strategy works. Now, let's go into more details on this strategy and how to manage the strategy. So, leverage is not free. Don't use more than you can cover on this strategy. Okay? If you can tie up, you know, less than half the capital, which is what I just showed you, amazing. Same stock, same shares if assigned, far less money down. I I like that, right? I mean, you know, whenever you buy things, if you can put less money down up front, great. Capital efficiency. I love that. So, if you were to just buy the shares, that's going to cost you $90,000. And by the way, if you have a smaller portfolio, just pick a cheaper stock. You can cross off a couple uh zeros here, couple of decimal points, and go for something that's $9,000 in total capital. For example, because this is very, very expensive. But, you know, at least this is a cheaper way of doing um you know, getting into Micron than buying 100 shares. You can clearly see that if you buy 100 shares, 90 grand. If you sell a put option, your actual capital is 43 grand. you know, you know, the break even times 100. That's because it's not 500. It's not the $500 strike. It's because you collected $6,000. So, it's $6,000 um lower on your break even. Okay? So, it ties up less than half capital. Now, that's exactly where people get really greedy. They think, "Okay, I'm tying up less than half of the capital, so, you know, I have $49,000 left. Let me, you know, go do more risky strategies." No, no, no. Don't you know I can only say so much on YouTube without getting in, you know, too much specifics that would throw people off or be too complicated or be completely, you know, potentially dangerous to the YouTube algorithm. Things I can't mention. Man, I just see so many people getting too greedy. Okay, let me just put it that way. Don't be too greedy. Obviously, easier said than done, but if this is something you take seriously, again, I'd love to help you. I can definitely show you one-on-one all the mistakes that can happen with a number of strategies, not just the strategy that I'm showing you today. All right, let's go into number three. Not every stock is worth selling. Okay, we talked about this in terms of chasing volatility, but also uh on the other end of the spectrum, there's a lot of safe stocks that just they're not worth it. They're they're not worth it. Okay, so the same expiration, you can go out very far in terms of, you know, date. I like to use Coca-Cola as a lot of my examples because it is notoriously very very low volatility. You can see here just very tiny premium, right? I mean, you go so far out, $72 strike price and the premium is just a couple bucks. So, it's very, very low, it barely pays you anything. So, same money tied up for the same year and a half, very, very um different pay, right? So, a stock that moves a lot, got those dollar signs, guys, you got the bicep over tricep, you know, juicy, you know, steak, whatever. It's just beautiful. When you got that volatility going on, that's where the gains are. That's where the real gains are. So, that's what the premium that you collect. It feels nice. Feels nice. You got that money in your account. Go get some nice spicy tikka masala. Travel somewhere. Beautiful. Whatever, right? Take care of your family. But um when you look at a low volatility stock, I mean there's like h it's like a few drops of water there. It's not that attractive. So the premium is way too low. Same money tied up, but just it's not worth doing. Okay, so these are kind of the two. Feel free to find the middle point. Again, I can only say do so much on this short YouTube video, but if you want implementing, I can find the middle ground for you as well if that's something that you feel like you need because some of this stuff can get you into trouble. Yeah, it can be too attractive. Yeah, there's a lot of too attractive things and then this stuff doesn't make any sense doing it all. So, the fourth one is volatility. This is this is the the secret sauce. Okay, I'm not going to gateep this. I'm just going to show you how it is. Volatility is the most important factor because a long-term leap option, there is a lot going on with it. So, um, the biggest value is really time, okay? Because it's a long-term leap option. Time is the biggest value. You can see I highlighted here on the screen Vega. So, Vega here is 2.1. That's the most important figure because Vega is volatility. Okay? The higher this number, the more the option is impacted by small changes in volatility. You got to think about it. If something is a little bit more volatile today, it's likely going to be a little bit more volatile for the foreseeable future. And this option is so long-term that that little bit today could mean a very very big difference over that time period. Right? Think about it as buying coffee every day. If you buy $5 worth of coffee every day, over a year, it's going to be in the couple thousand range, right? It's going to be over $1,500. So, you can see how something small today can be a lot in over a year. And the same thing is true for volatility. A little change of volatility today could end up changing the valuation of the LEAP option completely in the year and a half. Right? You can see here in a 30-day period on Micron, um, yeah, the the Vega is a lot smaller. It's 79. So, when there's a change in volatility, yeah, there's a change in the option price. Okay, here there's two contracts. I'm going to paint this really interesting picture for you and then we'll watch a short video and I'll also explain it to you. So, two contracts, same stock, one expires in a week and one expires in a year. Okay. Now, we can see the long one moves about three times as much. Here's what it looks like. Two options. One is 80, one is $211. Three times different. And if implied volatility falls by 10 points, you get a really massive rise in terms of the money that you have made. Let me explain to you why you're actually making money when volatility falls. So, what we saw in that short clip is there's a three times difference, okay, as you see on my screen. But when implied volatility falls, that's actually where you make a lot of your money. Because if implied volatility falls and the stock becomes less volatile, there's less that can happen. And because you already sold the major money up front, if less can happen, that's a good thing for you. Okay, so you can see here how if implied volatility falls, this is kind of a complicated factor. You might be a little confused, which is normal because if you're new or even if you're experienced, this is a very complicated topic. Okay, I'm just going to brush the surface of how this works. If implied volatility falls, the option in this strategy would gain value. Okay, don't worry about it. It's not going to kill your results. Um, everything else that I covered should, you know, if you if you understood that, then you're fine. This is a little bit more advanced. Okay, but so here's the picture that you want to see. Okay, if you want to see a stock that has gone up, come down, a little bit of consolidation, this is a good time to uh get into a strategy like this. And volatility comes back is really really normal. So every time a stock comes up in terms of volatility, it does typically drop off and it kind of mean reverts back to what is uh standard and typical. So you want to be selling LEAP options in this more elevated area. Okay, so let's go into number five. And number four, I can go into much more detail, but it's it's it is more complicated. Okay, so number five, let's move on to something that's very simple, which is think like a business owner. Literally look at Micron stock. Okay, is this a real company? You might end up owning it. Okay, you might end up owning it. So is this a real company? Ask yourself, is this a real company? Do you want to own it? You can do any other stock. I'm not sponsored by anyone. You can choose a different stock, right? I'm just using this as an example. So you want to look at the revenue that the company is making. Whatever company that you pick, you want to make sure that revenue and profit quarter after quarter is looking very good. Obviously for Micron it has absolutely exploded from you know 11 billion 13 billion 23 billion and this company has just skyrocketed. You can see net income also in a very clear trajectory and path. Very very important what I do when I look at companies that I want to sell options on or leaps must be a good business. All right so take your time go over uh the numbers go over number four if possible and if you don't understand that reach out to me ideally schedule a call. Um it's free to learn about my program it's free to see um if it's a good fit for you. Number four is very important. It is a little bit more technical, so you may need help with that. Otherwise, implement the strategy in your portfolio and comment on the video. Let me know how it goes for you. Subscribe to the channel. Thank you so much for watching and I'll see you in the next one.