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

Short-term traders have Micron Technology, Inc. in their sights

by 8/5/2014 12:32 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 today is Micron Technology, Inc. (NASDAQ:MU), where traders are placing both short- and long-term bets.

Most Active Options Table

Aside from a massive spread at the January 2015 40 put and call, Micron Technology, Inc.'s most sought-after option is the in-the-money weekly 8/8 31-strike call. Specifically, there appears to be buy-to-open activity at the weekly strike -- with 64% of the 4,012 contracts exchanged here crossing at the ask price, and implied volatility up 3.9 percentage points. Traders are scooping up these bullish bets at a volume-weighted average price (VWAP) of $1.20, resulting in an at-expiration breakeven price of $32.20 (strike plus VWAP).

Meanwhile, the weekly 8/8 32.50- and 33-strike calls are also being bought to open. The VWAP for the former is $0.34, making for a breakeven point of $32.84 at this Friday's closing bell, when the contracts cease trading. The VWAP for the latter is $0.22, yielding a breakeven mark of $33.22. All three sets of call buyers will profit at expiration, should MU be sitting above the aforementioned levels; whereas the speculators will forfeit the initial premium paid, should they be holding onto out-of-the-money contracts at week's end.

On the charts, Micron Technology, Inc. (NASDAQ:MU) is churning near breakeven today at $31.70, but has more than doubled in value year-over-year. Not surprisingly, long calls have been the contracts of choice in the semiconductor stock's options pits -- though some of these may have been at the hands of short sellers, as 11.5% of MU's float is sold short. Should the shares maintain their longer-term uptrend, a capitulation among the shorts could usher in a fresh wave of buying power.


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