OptionsHouse

Options Trading News

May 10, 2013  Fri 11:16 AM CT

MU: SEE CHART GET CHAIN FIND STRATEGIES
Micron Technology has been explosive, but one big investor sees resistance on the chart in the long term.

optionMONSTER's tracking programs detected the sale of some 26,000 January 2015 12 calls for $1.89 to $1.91. Volume surpassed previous open interest of 19,059 contracts, indicating that a new position was initiated.

Writing calls locks in the price where the investor must sell shares in the maker of computer-memory chips. He or she probably owns the stock and is using the options as part of a covered call trade, a common strategy that reduces volatility.

It's noteworthy that the investor chose the $12 level, because that's the same area where the stock rolled over in early 2011. So today's trader seems to think that resistance will hold in the long run. (See our Education section for more on how options can be used to target key price levels and time price swings.)

MU is up 0.74 percent to $10.79 this afternoon and 70 percent since the beginning of the year. Profit missed expectations the last time results came out in March, but a strong revenue number gave investors confidence that demand was growing.

Today's call selling pushed total option volume in MU to almost 5 times greater than average.
Share this article with your friends


Related Stories

MU

Heavy call volume is bullish on Micron

May 27, 2016

The memory-chip maker has risen 19 percent in the last week, and call buyers are looking for more gains in the next month.

OptionsHouse

Premium Services

Education & Strategy

The Movement of Delta

In our last column, we spoke about delta. You might remember that we discussed what delta was and what factors affected or changed delta. As you recall, we stated that three factors will have an effect on delta. They were movements of time, volatility, and underlying price. Today, we want to take a further look into the change of delta, this time focusing on change due to the movement in the underlying price. 

View more education articles »