Options Scorecard: Not Selling Micron Options and WTI Above $80 Were Both Right

TL;DR

• Two predictions I recorded earlier came due this week, and both were right. The first was a decision not to sell Micron options before its September 30 results. The second was a forecast that WTI crude would stay above $80 through September. Two for two, which is too few to prove anything.
• No losses this week, but the Micron win has two caveats. Micron rose 15.67% from September 16 to October 2, more than the 10.9% that options prices implied for that period. But 14.65 points of the rise came before the September 30 results, and only 0.89% came in the two sessions after them.
• WTI settled at $90.42 on September 30. That is 9.7% above the $82.40 price on August 14, when the forecast was recorded, and $10.42 above the $80 line.
• I am no longer assuming memory-chip stocks will move more than their options imply. After its results, Micron moved less than option prices implied. Twenty-five other recorded positions have no result yet.

The Board

Two predictions scored this week, both right, with Micron's gain split into the part before its results and the part after.

Two predictions reached their end date this week. A pass on this site is a recorded decision not to take a trade, and it is scored as the trade that was skipped. The previous scorecard carried the rest forward.

Micron: Not Selling Options Before the September 30 Results

I recorded this decision on September 16 in the Micron thesis check. Micron stock was $929 that day, and the options expiring October 2 priced in a move of 10.9% either way, known as the implied moveThe implied move is how far the options market expects a stock to move on an event, up or down, worked out from options prices. A 12% implied move on a $50 stock means traders are paying for a swing to roughly $44 or $56. It is what is already priced in, so the stock has to beat it for an options bet to pay.. I decided not to sell covered calls or cash-secured puts, which collect a payment (the premium) in return for taking on risk. This memory-chip group had moved more than its options pricing on every report that cycle.

Micron closed October 2 at about $1,074.54. StockAnalysis.com shows $1,074.19 and Yahoo Finance shows $1,074.89, so the figure here is their average. That is +15.67% from $929, against 10.9% priced. Someone who sold the at-the-money straddle, a pair of options that loses money when the stock moves a lot in either direction, collected about $100.85. They would have owed roughly $144.54 at expiry, a loss of about 43% of what they collected. The decision not to sell is scored a win.

Two things make the Micron result less clear-cut than it looks.

Period	From	To	Move
Whole period	$929.00 (Sept 16, intraday)	$1,074.54 (Oct 2 close)	+15.67%
Before the results	$929.00	$1,065.11 (Sept 30 close)	+14.65%
After the results	$1,065.11	$1,074.54 (Oct 2 close)	+0.89%

First, almost all of the Micron rise came before the company reported. The stock closed at $1,097.39 on October 1, up 3.03% on the day, then fell 2.1% on October 2. At the September 29 close, options implied about 7.6% either way for the week, and the reaction to the results landed well inside that. The reason I gave for staying out was that Micron's reaction to its own results beats the options price. That did not happen. The stock beat the price because it climbed for two weeks first. Micron reported revenue of $54.23 billion against its own forecast of $50.0 billion, per its release, and the stock still moved less than priced afterwards. The earnings tracker has the full table.

Second, the score only checks whether Micron moved more than options implied. That outcome loses money for a straddle seller. Someone selling cash-secured puts would have kept the whole payment, because the stock rose. Someone selling covered calls would have made money but given up most of the rise above the strike. The ledger scores skipped premium-selling trades against the implied move, so this one is a win. Selling puts would still have been a good trade.

For comparison, the S&P 500 fund SPY rose 1.51% from the $758.23 intraday price recorded on September 16 to its October 2 close of $769.65. Micron beat the index by about 14 points. Against the September 16 close of $754.05, the index gain is 2.07%.

WTI Crude Above $80 Through September

The WTI forecast was recorded on August 14 in the oil piece. It said WTI would stay above $80 through the end of September, because the Strait of Hormuz was still blocked. The price then was $82.40, a late-session quote taken after the exchange settlement.

WTI November futures settled $90.42 on September 30, up $1.04 on the day, per Xinhua via The Star. That is +9.73% from $82.40, so the forecast was right. One figure is a quote and the other a settlement, so the percentage is approximate.

Three things in this section are not verified:

• The $90.42 figure has one source. Another search result put WTI near $93 on September 29, while Xinhua's figures imply $89.38 for that day. I couldn't reconcile them. Both are far above $80, so the score does not depend on which is right.
• I did not pull every daily settlement since August 14. As a check, the USO oil fund never closed more than 0.4% below its August 14 close, and its low was on August 25. On a simple ratio that puts WTI near $82 at the lowest point, still above $80. USO tracks futures with roll costs, so this is a proxy and not a price.
• I did not verify whether oil tanker traffic through the Strait of Hormuz, the blocked shipping route behind the forecast, returned to normal. Brent settling at $103.53 on September 30 suggests it had not, but that is an inference.

What Micron's Reaction Shows About Option Pricing

Over the whole period I tracked, Micron moved more than option prices implied. Its reaction to the results themselves did not. The two differ because the stock rose 14.65% in the two weeks before the report, when no event was scheduled.

For next week I am no longer assuming that memory-chip stocks will move more than their options imply. Micron's reaction was smaller than priced, which is what the September 16 piece said had not happened once that cycle. One report does not reverse the earlier pattern of large moves. It is a reason to check each stock's last four reactions against its options price before taking either side. The rule from August still holds: let the stock's recent actual moves decide, and ignore any general view that options are expensive or cheap.

Not Scored: Nike and the Open Positions

• Nike was not scored, because no trade was recorded for it. The Nike piece argued "knife, not bottom" when the stock was $41.70, and Nike reported on October 1. It closed October 2 at $33.87 per StockAnalysis.com, 18.8% below that price. That figure has one source, so it is not in the hit rate or the ledger.
• Twenty-five recorded positions have no result yet: 23 are in place and 2 are waiting for an entry condition that has not happened. None has an end date before next Friday. The full ledger carries every row, with CSV and JSON downloads, and the current week-ahead hub lists what reports next.

With only two scored calls this week there is no average-gain-per-trade figure to report. The ledger needs five in a category first.

The One-Line Read

Both predictions that came due were right. Micron's gain came mostly before its results, and afterwards it moved less than option prices implied, so I'd treat the win as one data point.