Market News

August 1, 2014  Fri 3:47 AM CT

A huge trade apparently sees limited upside for shares of Micron Technology.

optionMONSTER systems show that 17,000 January 2016 40 calls traded for $3 in a single print yesterday. This is a new position, as the volume was above the strike's previous open interest.

A few minutes later, a block of 612,000 shares was bought for $30.12, followed by another 1,021,069 purchased for $30.09. Combined with the options, this creates a covered-call trade that is bullish up to, but not beyond, the $40 level through early 2016. The $3 credit also provides a downside cushion. (For more on the strategy, see our Education section and this recent column in our Advantage Point newsletter.)

MU fell 6.09 percent to $30.55 yesterday, its lowest close since June 10. The memory-chip maker reached a 12-year high of $34.85 two weeks ago.
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