▶ Full Post Text
MU reported after hours yesterday. Closed the session +15.74%, hit +18% intraday. But that 15 minute premarket candle swung from +18% down to +8%, then ripped back to +13%. If you were holding naked calls at Thursday's close, that 10% premarket range was more than enough to stop you out.
This is my third cycle trading MU options. Back in 2023, when MU posted a 5.8Bloss,IboughtcallsandpeoplethoughtIwasanidiot.In2025,with5.8*Bloss*,*IboughtcallsandpeoplethoughtIwasanidiot*.*In*2025,*with*37.3B revenue, I sold puts and got told I was too conservative. This cycle, I held a 1150C calendar spread through earnings. No naked longs. Why? Because MU's IV ran to 180%+ the day before the print. That level of IV means the market is pricing in an 8% to 12% move. And sure enough, the actual numbers, 414.6Brevenue,84.9414.6*Brevenue*,84.9500B midpoint guidance, each one historically massive. But the market had already priced in a lot of it.
MU is up 325% year to date. Your edge is not in guessing whether a print beats. At this level of information asymmetry, retail is never going to be faster than institutions. The real edge is in the gamma decay and IV crush the morning after. Once the market opens post earnings, OTM call IV collapses from 180% down to 60% or 70%. That decay happens faster than most people expect.
**My strategy framework**: if you must hold through earnings, avoid naked options. Use calendar spreads, sell the near month and buy the far month, to offset the IV crush. Or just go with a debit spread to cap max loss. One more thing I learned the hard way: don't reload immediately after the print. Wait 30 to 45 minutes for gamma and IV to reprice. The support and resistance levels you see after that window are the actual market conviction, not opening emotion.
I'm bullish on MU's fundamentals long term. The SCA long term contract customers put down $22B in cash upfront. That signal says more than any analyst price target. But fundamentals are one thing, position sizing is another. Anyone else hold MU through earnings? How did you hedge?