Micron Technology, Inc. (MU) Bears Active Amid Apple-Samsung Buzz

Micron Technology, Inc. (MU) is being pressured by Apple Inc. (AAPL)-Samsung rumblings

Digital Content Group
Feb 24, 2015 at 10:52 AM
facebook twitter linkedin


Micron Technology, Inc. (NASDAQ:MU) is down this morning on rumors that Samsung has been selected to supply dynamic random access memory (DRAM) chips for Apple Inc.'s (NASDAQ:AAPL) next iPhone. Option bears are responding, with MU puts flying off the shelves at six times the expected intraday rate.

Digging deeper, the equity's weekly 2/27 28.50-strike put is seeing buy-to-open activity, as speculators wager on additional downside for the security through Friday's close, when the series expires. While the shares have lost roughly 6% this morning to trade at $29.52, the $28.50 area -- which roughly coincides with MU's 320-day moving average -- has served as support in 2015. As such, delta on the out-of-the-money put is negative 0.23, representing a less than 1-in-4 chance the contract will be in the money at expiration.

Taking a step back, options traders have shown a propensity toward bearish bets over bullish in recent weeks. MU's 10-day put/call volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) registers at 0.86 -- or just 2 percentage points from a 12-month peak.

Despite today's pullback, shares of Micron Technology, Inc. (NASDAQ:MU) have added nearly 22% on a year-over-year basis. Should the stock bounce from underfoot support and resume its longer-term uptrend, a capitulation among bearish bettors could result in tailwinds.

Daily Chart of MU since January 2015

 

  

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners