Schaeffer's Trading Floor Blog

Options Check-Up: Micron Technology, Inc., Baidu Inc (ADR), and FedEx Corporation

Analyzing recent option activity for MU, BIDU, and FDX

by 3/17/2014 5:50 PM
Stocks quoted in this article:

Among the stocks attracting attention from options traders lately are semiconductor specialist Micron Technology, Inc. (NASDAQ:MU), China-based search engine Baidu Inc (ADR) (NASDAQ:BIDU), and package delivery service FedEx Corporation (NYSE:FDX). Below, we'll break down how options buyers are positioning themselves, and how much speculators are willing to pay for their bets on MU, BIDU, and FDX.

  • Long calls on MU -- which is up more than 155% year-over-year at $23.93 -- have more than quadrupled long puts at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) during the past 10 trading days. The resulting call/put volume ratio of 4.18 ranks in the 56th annual percentile, indicating the recent rate of call buying, relative to put buying, is slightly accelerated. Considering 11.6% of Micron Technology, Inc.'s float is sold short, perhaps some of this call activity came at the hands of short sellers hedging their positions against additional upside (or a potential post-earnings jump). Now is a good time to pick up short-term bets on MU, as the equity's Schaeffer's Volatility Index (SVI) of 54% ranks in the 40th percentile of its 12-month range. This means front-month contracts are slightly more affordable than usual right now, from a volatility perspective.

  • Though BIDU is down 12.4% from its March 6 closing price of $184.64 to trade at $161.66, the stock maintains a 10-day ISE/CBOE/PHLX call/put volume ratio of 3.01, which ranks 4 percentage points from a 12-month peak. In other words, speculators have been placing bullish bets over bearish at a near-annual-high pace recently. Of note, Baidu Inc's (ADR) SVI of 41% ranks lower than 64% of similar readings from the past year, meaning short-term options are attractively priced right now, relatively speaking.

  • FDX is sitting 4.3% lower year-to-date at $137.58, ahead of the company's fiscal third-quarter earnings report Wednesday morning. Meanwhile, in the options pits, FDX has seen heavier-than-usual long put activity, compared to long call activity, in recent sessions, as the equity's 10-day ISE/CBOE/PHLX put/call volume ratio of 1.58 ranks 11 percentage points from a 12-month high. With just one session to go before FedEx Corporation's quarterly event, the equity's short-term options have remained relatively affordable. This is evidenced by the fact that the stock's SVI of 24% ranks in the bottom 34% of its annual range.

permanent link
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT

Partner Center

© 2014 Schaeffer's Investment Research, Inc. 5151 Pfeiffer Road, Suite 250, Cincinnati, Ohio 45242 Phone: (800) 448-2080 FAX: (513) 589-3810 Int'l Callers: (513) 589-3800 Email: service@sir-inc.com

All Rights Reserved. Unauthorized reproduction of any SIR publication is strictly prohibited.

Market Data provided by QuoteMedia.com | Data delayed 15-20 minutes unless otherwise indicated.