OptionsHouse

Options Trading News

August 1, 2014  Fri 3:47 AM CT

MU: SEE CHART GET CHAIN FIND STRATEGIES
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.
Share this article with your friends


Related Stories

MU

Cramer: Put currencies in context

April 6, 2015

Discounting is a strange process. In the short term, it can be, and often is, just plain wrong. But in the intermediate term, there may be a reluctance to sell no matter how ugly.

Invest Like a Monster - San Diego: June 26-27

Premium Services

Education & Strategy

Introduction to Synthetics

"Synthetics" is the name given to the relationship of two separate positions, constructed differently, that have the same exact risk and reward at each and every price level. They say that there is more than one way to skin a cat...well, there is always more than one way to create an option position...

View more education articles »