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Most Active Options Update: Micron Technology, Inc. (MU)

Micron Technology, Inc. puts popular amid sector-related slip

by 7/17/2014 12:59 PM
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The 20 stocks listed in the table below have attracted the highest total options volume during the past 10 trading days. Names highlighted are new to the list since the last time the study was run, and data is courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. One name of notable interest this afternoon is Micron Technology, Inc. (NASDAQ:MU). Falling off the list since last time were Gilead Sciences, Inc. (NASDAQ:GILD), JPMorgan Chase & Co. (NYSE:JPM), and MannKind Corporation (NASDAQ:MNKD).


Micron Technology, Inc. is feeling the heat of sector peer SanDisk Corporation's (NASDAQ:SNDK) dreary revenue outlook today, with the shares lower at last check. However, considering the stock has rallied 53% year-to-date -- and yesterday tagged a 12-year peak of $34.85, which brought MU north of its upper Bollinger Band -- a near-term pullback may have been in the cards. Eleventh-hour put players are flooding the equity's options pits amid this slip, as they scramble to place bets on additional losses through tomorrow's close.

Diving deeper, the security's July 33.50 put is the most active MU strike this afternoon. The majority of the 18,343 contracts traded here have done so on the ask side, and volume easily outstrips open interest -- both signs of buy-to-open activity. Breakeven at tomorrow's close is $33.27 (strike less the volume-weighted average price of $0.23), and gains for the put buyers will accumulate on a move all the way down to zero. Risk, meanwhile, is limited to 100% of the premium paid, should the equity close out the week north of the strike price.

In spite of the stock's withstanding technical trajectory, long puts have been popular in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for example, the stock's 50-day put/call volume ratio of 0.39 ranks 2 percentage points from a bearish peak.

In the front-month series, specifically, a lofty accumulation of put open interest is currently housed at MU's underfoot July 33 strike. This could serve as options-related support for the stock through week's end, as the more than 9,000 contracts that reside here unwind through tomorrow's close. In fact, today's pullback was contained just north of this area when the equity hit an intraday low of $33.07, with Micron Technology, Inc. (NASDAQ:MU) last seen lingering near $33.26.


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