Get Paid 22% A Year To Let Someone Else Chase MU Stock Higher

Here is a way to get paid a meaningful income now on your Micron Technology shares, cash you keep no matter what, in exchange for agreeing to sell at a higher price if the stock keeps climbing.

After a run that saw its stock return over 645% in the past year, Micron Technology (MU) finds itself in an interesting spot, trading about 22% below its 52-week high. The company just delivered a fifth consecutive quarterly revenue record, driven by an AI-fueled memory supercycle. For owners of the stock, this presents a classic dilemma: lock in some gains, or hold on for the next leg up? Here is a trade that splits the difference.

22% annualized income on MU shares you already own, with 25% of upside room, by selling a covered call.

• You own (or buy) 100 shares of MU near today’s price of $949.83.
• Sell one call option on MU expiring 9/17/2027, with a strike price of $1190, about 25% above today.
• Collect roughly $22,790 in premium up front per contract (each contract covers 100 shares), which you keep no matter what the stock does.
• That premium is about 22% annualized on the $94,983 of stock –  income you earn just for holding.
• If MU finishes above $1190, your shares are called away at $1190. Counting the premium, your total return works out to about 44% annualized, but you give up any gains above the strike.

Both Outcomes Put Cash In Your Pocket

If MU finishes below $1190 on 9/17/2027, the call expires worthless, and you keep the full $22,790 premium and all your shares. That is about 24% over 400 days, income earned just for holding, and you are free to sell another call.

If MU finishes above $1190, your 100 shares are called away at $1190. You still keep the $22,790 premium, and counting it your total gain works out to about 49% over the holding period (about 44% annualized), a healthy exit. The cost of the trade is that any gain above $1190 is no longer yours. And if the stock instead falls, you keep the premium but still ride the shares down: the premium offsets the first 24% of the decline over the holding period and nothing beyond it.

What Upside Would You Be Handing Over?

The bull case is that this isn’t just another cyclical peak; it’s a new era for the business. Management has signed 16 multiyear Strategic Customer Agreements, or SCAs, which it says will “fundamentally transform our business model.” These are structured as “take or pay agreements with binding commitments,” providing a floor for profitability with gross margins promised to be “well above our peak quarterly margins in any past cycle.” For an investor, this suggests a de-risked company with unprecedented earnings stability, a recipe for a stock that could keep climbing well past your exit price. We explored the long-term potential for the stock in a separate analysis.

But there is another side to this story. Those same agreements that set such a high floor also come with a ceiling. The largest of these deals have a “ceiling price for existing products at the current CQ2 market price,” which is what drove the company’s record-setting profitability. This raises the critical question: has Micron effectively capped its own upside near the current historic highs? If you believe the memory market’s pricing power has largely been captured in these deals, then selling a call to collect income now looks like a savvy move to monetize peak conditions. The decision boils down to what you see in the company’s gross margin, which management guided to a record 86% for the fourth quarter. Watching if that number can push even higher is the key to judging how much upside you might be leaving on the table.

How Much Could The Stocks You Hold Pay You?

You may not own MU, but you almost certainly own something that could be paying you. Our Covered Call Finder lets you type in a stock, or a few, and instantly see the income a covered call could generate on each, then dial the strike up or down with a slider to balance more income against more upside. It is the quickest way to see what the names in your own portfolio could pay.

One Name, One Theme, Or The Whole Market

There is a ladder here. A covered call earns income on one company. A sector fund spreads that across one theme. Neither escapes the risk that a single industry hits a rough patch. The next rung is a core built across every sector, so the whole thing never rides on one bet.

The Trefis High Quality (HQ) Portfolio is that rung: about 30 quality businesses across sectors, each weighed on the full sweep of its fundamentals and sized and rebalanced with discipline. It has a track record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. Use the call for income on names you like; let a diversified, cross-sector core carry the long game.