Earnings Preview: Darden Restaurants, Inc., Schnitzer Steel Industries, Inc., and Micron Technology, Inc.

It's the tail end of earnings season. While attention has since shifted to more macro events like the Fed and the "Brexit" since tech stocks Apple Inc. (NASDAQ:AAPL) and Facebook Inc (NASDAQ:FB) were making big moves in the wake of their results, there are still a handful of notable names waiting to unveil their reports. Olive Garden parent Darden Restaurants, Inc. (NYSE:DRI), for instance, is slated to report earnings bright and early tomorrow morning, along with steel company Schnitzer Steel Industries, Inc. (NASDAQ:SCHN). Chipmaker Micron Technology, Inc. (NASDAQ:MU), meanwhile, will report earnings tomorrow evening. Here's a quick check on the pre-earnings options activity surrounding DRI, SCHN, and MU.

Amid relatively low absolute volume, pre-earnings DRI options traders have shown a preference for long puts over calls of late, per the stock's top-heavy 20-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.41. This trend is continuing today, with puts crossing at 20 times the average intraday pace, and buy-to-open activity detected at DRI's July 65 strike. On the charts, however, the shares have put in a strong performance in recent months, up 18% from their mid-February year-to-date low at $55.77 to trade at $65.86. What's more, Darden Restaurants, Inc.'s recent pullback during the broad-market "Brexit" sell-off was contained in the $64.50 region -- an area that put pressure on the stock in May, but seems to be now serving a more supportive role.

Over the past eight quarters, SCHN has averaged a single-session post-earnings move of 3.7% -- less than the 7% move the options market is pricing in for this time around. The stock could certainly benefit from a post-earnings swing to the upside, considering it's shed more than 27% since hitting an annual high of $21.57 on April 28 -- last seen at $15.71 -- and is now staring up at its formerly supportive 200-day moving average. Options traders have shown a clear preference for near-the-money puts over calls in the July series, per SCHN's front-month gamma-weighted Schaeffer's put/call open interest ratio (SOIR) of 1.63. In fact, the July 15 put is Schnitzer Steel Industries, Inc. top open interest position.

Call buyers have bombarded MU in recent weeks, as evidenced by the stock's 10-day ISE/CBOE/PHLX call/put volume ratio of 3.53, which ranks in the 76th percentile of its annual range. Specifically, the stock's July 14 and 14.50 calls have seen the biggest rise in open interest over this time frame -- with a collective 45,520 contracts added, a healthy portion of which were bought to open, according to the major options exchanges. Technically, MU has been booming lately amid M&A buzz and an onslaught of upbeat analyst attention. In fact, since tagging its most recent low of $9.35 on May 12, Micron Technology, Inc. (NASDAQ:MU) is up 42% at $13.30.

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