Call Players Pile On as Micron Technology, Inc. (MU) Hits New Highs

Calls are outpacing puts once again, after Micron Technology, Inc. (NASDAQ:MU) hit a new annual high

Dec 27, 2016 at 2:34 PM
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Options traders have set their sights on Micron Technology, Inc. (NASDAQ:MU) in recent weeks. In fact, per data from Schaeffer's Senior Quantitative Analyst Rocky White, the semiconductor stock has seen some of the heaviest options volume in the past two weeks, with a particular tilt toward the call side of the aisle. By the numbers, 560,028 calls have traded on MU stock in the last 10 sessions, compared to 247,186 puts. This trend is being continued today, too, with 39,741 MU calls on the tape at last check, versus 19,694 puts.

This call-skew is echoed when looking at all buy-to-open options activity on MU at the major options exchanges. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), for instance, the stock sports a top-heavy 50-day call/put volume ratio of 4.01. What's more, this ratio ranks in the 81st annual percentile, meaning calls have been bought to open over puts at a faster-than-usual clip.

Drilling down, the January 2017 20-strike call is home to MU's top open interest position, with 117,641 contracts outstanding. According to data from the ISE, CBOE, and PHLX, a healthy portion of the action here in recent months has been of the buy-to-open kind, meaning traders are expecting MU to settle north of the round $20 mark at the close on Friday, Jan. 20 -- when the front-month options expire.

The optimism toward MU is seen elsewhere on the Street, as well. Although short interest edged higher in the most recent reporting period, it accounts for a low 5.8% of the stock's available float. And while 15 of 19 analysts maintain a "buy" or "strong buy" rating on the shares, Micron was featured in a Barron's article over the weekend, which said the firm "has a shot at becoming a new kind of tech giant" (subscription required).

Looking at MU's technical backdrop, though, it's not too hard to see why the semiconductor stock -- unlike fellow outperforming peer NVIDIA Corporation (NASDAQ:NVDA) -- has so many bulls in its corner. Year-to-date, the shares of Micron Technology, Inc. (NASDAQ:MU) have surged a brow-raising 65%. What's more, after taking out previous resistance near $21 last week amid a post-earnings bull gap, the stock hit a fresh annual high of $23.64 earlier today, last seen trading up 0.5% at $23.37. Nevertheless, there could be some near-term headwinds in MU's future, considering its 14-day Relative Strength Index (RSI) is docked at 79.8 -- solidly in overbought territory -- suggesting a short-term pullback may be in the cards.

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