Selling the Micron Straddle: Three Scenarios

The sell-straddle decision on MU, honestly mapped:

Scenario 1: Normal print (probability ~60%)

• MU moves 5-7%, IV crushes → premium sellers win cleanly
• Your edge: implied 9% > realized ~6-7%

Scenario 2: Genuine surprise (~30%)

• MU moves 10-15% on guidance shock → straddle sellers lose ~2-5% on the move
• Still survivable if the crush absorbs part of the loss

Scenario 3: The tail (~10%)

• MU moves 20%+ (major guide miss or blowout) → straddle sellers get run over
• The 280% YTD context makes this tail fatter than usual

The honest verdict: the sell is positive-EV on the numbers, negative-EV on the narrative (this print genuinely might be different). Rehearse both, pick your size on Stock Picks.