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

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

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Published on Feb 24, 2015 at 10:52 AM
Updated on Apr 20, 2015 at 5:32 PM

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


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