Options Bulls Blast Micron Stock After New High

Micron shares hit their highest point in 17 years earlier

Mar 6, 2018 at 1:03 PM
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Micron Technology, Inc. (NASDAQ:MU) has shot 3.9% higher today to trade at $54.08 -- earlier hitting a 17-year high of $54.64 -- after Goldman Sachs raised its MU price target to $58 from $55, citing expectations for rising DRAM prices. Plus, CNBC's Jim Cramer said the chipmaker could benefit the most from a resurgence in PC popularity, and called MU stock a "buy on this breakout." Options traders have been quick to respond, too, with volume pacing in the 100th annual percentile.

More specifically, 246,394 calls and 80,024 puts have traded on MU stock so far today. Speculators appear to be targeting 55-strike calls, with buy-to-open activity detected in the weekly 3/9, March, and April series. If this is the case, the goal is for the stock to topple the $55 level over the next several weeks. The last time Micron shares traded north of here was in September 2000.

Today's call-skewed session is just more of the same for Micron options traders. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 409,314 calls in the last 20 sessions, compared to 56,751 puts, resulting in a top-heavy 20-day call/put volume ratio of 3.93.

It's not surprising to see options traders so bullish toward Micron, considering the shares have more than doubled in value year-over-year. This long-term rally has coincided with a 50% surge in short interest since last May. Not only does it speak volumes to MU stock's underlying strength to surge in the face of such intense selling pressure, but a round of short covering could create more tailwinds for the equity.

 

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