New Billion-Dollar Plans Give Chip Stock a Boost

MU is trading at its highest levels in nearly a year

Deputy Editor
May 18, 2023 at 11:05 AM
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The shares of Micron Technology Inc (NASDAQ:MU) are getting a boost today on reports the chipmaker is planning to invest up to $3.7 billion in extreme ultraviolet (EUV) technology in Japan, after getting $1.48 billion in financial incentives from the Japanese government. Plus, the company will install a state-of-the-art manufacturing line at its plant in Hiroshima to create dynamic random-access memory (DRAM) chips. 

At last glance, MU was up 4.5% at $67.85, and trading at its highest levels since June. The security also moved above its 320-day moving average this week, a trendline that loomed overhead for over a year. Year-to-date, the equity is up 35.9%. 

Options bulls are blasting Micron Technology stock, with 125,000 calls exchanged so far -- eight times what's typically seen at this point -- compared to 40,000 puts. Expiring at the close tomorrow, the May 66 call is the most active by far, with positions being opened there. 

This call volume denotes a bit of a sentiment shift, as MU's 50-day put/call volume ratio of 1.32 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) ranks higher than 84% of readings from the past year. 

Now looks good time to weigh in on the security's next move with options. The stock is seeing attractively priced premiums at the moment, per its Schaeffer's Volatility Index (SVI) of 37%, which sits in the 15th percentile of its annual range. 

 

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