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Micron Technology, Inc. (NASDAQ:MU) finished with a modest 0.5% gain yesterday, but that was enough to notch a fresh decade-plus high of $26.25. Meanwhile, the semiconductor concern's 30-day at-the-money implied volatility (IV) rose 2% to 40.6%, signaling elevated interest in short-term options. In fact, MU's two most active strikes expire this month.
Leading the way was the in-the-money May 26 call, where more than 17,000 contracts traded. However, the International Securities Exchange (ISE) indicates that a sizable portion was sold to close, as traders potentially locked in gains ahead of expiration. Open interest at the strike also decreased by 12,925 contracts overnight, confirming our suspicion of closing activity.
On the other hand, Micron Technology's second most active strike was the out-of-the-money May 27 call, which saw nearly 13,500 contracts exchanged -- the majority at the ask price, suggesting they were bought. IV increased here, and open interest added 9,375 positions overnight, together pointing to buy-to-open activity. By purchasing these calls, the traders anticipate MU will extend its long-term rally, and topple the 27 strike -- something that hasn't been done in almost a dozen years -- by the close on Friday, May 16, when the front-month options expire. The equity came within a chip-shot of this mark yesterday, when it tagged $26.82 in intraday trading.
Elsewhere, however, Wall Street is much more mixed on MU. While the stock has received 11 "buy" or better ratings, it's also been hit with 10 combined "hold" or "sell" opinions.
Technically speaking -- and as alluded to earlier -- Micron Technology, Inc. (NASDAQ:MU) has been on a long-term uptrend, tacking on nearly 182% year-over-year. If the shares can maintain this trajectory, a round of analyst upgrades could fuel another leg in the equity's ascent -- much to the liking of Thursday's option bulls.