Micron Technology, Inc. (MU) Turnaround Brings In Options Bulls

Micron Technology, Inc. (MU) call buying has picked up

by

Published on Feb 10, 2015 at 11:15 AM
Updated on Apr 20, 2015 at 5:32 PM

Micron Technology, Inc. (NASDAQ:MU) has reached a new supply agreement with Inotera Memories. In response, the stock has added 5% to trade at $29.78, as it rebounds from yesterday's 2% fall. Bullish speculators appear to be stepping up to the plate, with calls crossing the tape at 1.4 times normal intraday volumes.

The option seeing the most action is the weekly 2/13 30-strike call, where it appears some traders are choosing the buy-to-open route. These speculators need MU to topple $30 by this Friday's close, when the contracts expire. The likelihood of these options moving into the money by week's end has increased dramatically with today's gains, as the delta for the contracts has jumped to 0.42, compared to just 0.12 yesterday evening.

The focus on calls is an unusual sight in MU's options pits, as puts have dominated of late, relatively speaking. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day put/call volume ratio of 0.39 outranks all but 10% of similar readings from the past year.

On the other hand, analysts have remained almost completely bullish toward the shares. In fact, 82% of covering brokerage firms deem the stock worthy of a "buy" or better.

Micron Technology, Inc. (NASDAQ:MU) has struggled from a technical perspective, dropping roughly 15% in 2015. Also, MU is currently testing its 20-day moving average, above which the security hasn't closed since Dec. 31.

Daily Chart of MU Since December 2014 With 20-Day Moving Average

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