Call Buyers Swarming to Micron


Like a strong and silent type, Micron Technology (MU) is quietly winning the hearts of tech traders.

Even before the memory-chip maker stunned investors with blowout guidance and an aggressive buyback, options volumes were on the rise. They accelerated this week, making MU the busiest equity underlier in all of yesterday’s session.

Its 25-May 61 calls led the charge, with large blocks fetching $0.30 to $1.28. Volume rose past 20,000 contracts in options that expire this afternoon, so those buyers were looking for a strong end to the week.

More short-term activity was detected in the 25-May 62s. Over 17,000 of those changed hands, mostly for $0.20 to $0.52. The 25-May 60s also turned over more than 15,000 times.

Looking at all its options, MU traded almost 500,000 in total. Not only did that exceed the next-busiest equity, Bank of America (BAC), by more than 100,000 contracts. It also comes at a time when other big tech names have seen their volumes wane. In FB, for example, the 20-session running average has slid from 400,000 to 246,000 since the start of May. AMZN’s down from 160,000 to 137,000.

TradeStation’s Hot Lists, showing most active options underliers

So what’s going on in MU? First, earnings have been consistently strong. Some chip makers have been beset by worries about a slowdown in mobile, but not MU. Analysts also say the Idaho-based company is enjoying a harmonious mix of lower costs by higher selling prices for its products. That’s letting management share the wealth with investors in a big way and prompting bullish notes across Wall Street.

In conclusion, MU has spiked on good news and options traders are looking for the gains to continue in the long holiday weekend.

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David Russell is VP of Market Intelligence at TradeStation Group. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.