Eleventh-Hour Micron Technology, Inc. (MU) Bulls See a Bigger Bounce

Micron Technology, Inc.'s (MU) weekly 3/13 28-strike call is in focus today

by Karee Venema

Published on Mar 12, 2015 at 1:08 PM
Updated on Apr 20, 2015 at 5:32 PM

Micron Technology, Inc. (NASDAQ:MU) followed its sector peer Intel Corporation (NASDAQ:INTC) into the red at the open, after the latter offered up a dreary current-quarter sales forecast. Shares of MU have since recovered, though, and were last seen up 1% at $28.17. In the options pits, calls are trading at 1.6 times what's typically seen at this point in the day, with a number of speculators betting on a bigger bounce by week's end.

Drilling down, MU's weekly 3/13 28-strike call has seen the most action today, with 13,418 contracts on the tape -- roughly 30% of the equity's total intraday call volume. It appears the majority of these positions are being bought to open, as traders roll the dice on MU extending its lead north of $28 through tomorrow's close, when the weekly series expires. Delta on the call is docked at 0.59, suggesting a 59% chance the option will expire in the money.

Widening the sentiment scope reveals traders have preferred long puts over calls on a stock that's shed roughly one-fifth of its value in 2015. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MU's 50-day put/call volume ratio of 0.44 ranks in the 93rd annual percentile. In other words, puts have been bought to open over calls with more rapidity just 7% of the time within the past year.

Outside of the options arena, the brokerage bunch has taken a glass-half-full approach -- although it appears opinions are beginning to shift. Of the 21 analysts covering the shares, 18 maintain a "buy" or better rating, versus two "holds" and one "strong sell." Meanwhile, Micron Technology, Inc.'s (NASDAQ:MU) average 12-month price target of $42.35 stands at a 50% premium to current trading levels, as well as in territory not charted since August 2001.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earning announcements before it's too late!



NEW! Explore Schaeffer’s Partners' deals and get connected to top online brokerages with deals tailored exclusively for our readers.  Get answers to your questions regarding transfer fees, commission rates, programs and available discounts related to online trading services.

MORE | MARKETstories

The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.
Patent Lawsuit Loss Sends AMRN Stock Spiraling
Amarin just lost a major U.S. patent lawsuit for its heart drug Vascepa
RH Stock Sinks Despite Earnings Beat
J.P. Morgan Securities and Cowen and Company cut their price targets
The Latest Investor's Guide to Precious Metals
Learn how to protect savings and maximize returns by investing in precious metals.