Micron Technology (MU) stock is up from a recent trough and in a trading range. But short-put MU yields at a strike 9% lower over the next month make over 4.50%. That's very attractive to value investors.
MU is at $961.26 in midday trading, up 31% from a $739 trough price on July 29. However, it's been treading water for the past three months, as the chart below shows. For example, on May 29, MU closed at $971.00.
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MU stock - last 3 months - Barchart - Aug. 21, 2026Shorting MU Puts Works
This makes it ideal for short-sellers of out-of-the-money (OTM) cash-secured puts. You can make significant yields shorting these puts over one month.
For example, I pointed out in a Barchart article ("Analysts Keep Hiking Micron's Revenue and Price Forecasts - Shorting MU Puts Works Here," Aug. 14) that MU stock looked cheap.
In addition, its $900 strike put options had a one-month yield of 4.864% (i.e., $43.78/$900.00). Today, those puts that expire Sept. 11 have fallen to $28.80.
Wow! An investor would have made $14.95 over one week. That's 82% of the $18.17 climb that MU stock made over the period. However, the investor only had to risk $900, not the $949.83 where MU was on Aug. 14.
As a result, the short-put return was close to the gain from holding MU stock: $14.95/$900.00 = 1.66% gain, vs. 1.91% in stock gains.
Moreover, if MU stays flat from here, the investor will make 4.864% over the period, rather than 1.91% from holding MU.
New Short-Put Yields are Still High
For example, look at the Sept. 25 expiry option chain. It shows that the $900.00 strike price put, which is 6.8% lower than today's price, has a midpoint premium of $48.40.
That means a cash-secured short-put play has a one-month yield of 5.211% (i.e., $46.90).
That's better than a week ago, even though the strike price is the same; MU stock has risen, and the distance from the trading price is larger.
MU puts expiring Sept. 25 - Barchart - As of Aug. 21, 2026However, the delta ratio is relatively high at 32.07%, implying close to a one-third chance MU could drop to $900.00 by Sept. 25.
So, taking a more conservative line, the $880.00 put short-put play has a midpoint premium of $40.00. The strike is almost 9% below today's price. That gives the cash-secured short-put investor a one-month yield of 4.545% (i.e., $40/$880.00).
The bottom line is that this provides an attractive expected return (ER) to an investor, especially if it can be repeated. For example, over six months, the ER is 27.27%.
That's the same as buying MU stock today and seeing it rise to $1,223.
Downside Risks
Don't forget that an investor could still end up with an unrealized loss. For example, if MU drops below the breakeven point of $840.00 by Sept. 25 (i.e., $880-$40), then the investor's assigned purchase of 100 shares could be underwater.
But, at least the investor has alternatives. They can short covered calls or just hold on. As I pointed out in my last article, MU stock is worth over $1,900 per share, and analysts have prices targets over $1,500 per share.
The bottom line is that shorting one-month expiry MU puts is still an attractive play for value investors.
On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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