Options Traders Tail Chip Stock Amid Cheap Options

Calls have been popular in the options pits in the last 10 weeks

Deputy Editor
Jul 23, 2020 at 1:54 PM
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Micron Technology Inc (NASDAQ:MU) is moving up on the charts today, up 1.9% at $52.62 at last check, with the rally appearing to run into a ceiling at the $54 level. Today's pop isn't enough for MU to conquer its year-to-date breakeven level -- down 1.8% in 2020 -- but options traders have been piling on nonetheless.

On the charts, that $54 area served as resistance earlier in June. And while the shares have added 69% off its March 18 lows of $31.13, they have a ways to go to reach their Feb. 12 two-year high of $61.19. 

MU July 23

An unwinding of bullish bets in the could certainly add to options-related resistance as well. MU's 50-day call/put volume ratio of 3.24 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands in the 100th percentile of readings in the past year. This means that Micron stock has never been this call-heavy in the past 12 months. 

Regardless of direction, earnings have come and gone for the semiconductor concern, so now could be a good time to weigh in on MU options. The stock's Schaeffer's Volatility Index (SVI) of 41% stands higher than just 10% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

 

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