OptionsHouse

Options Trading News

August 19, 2013  Mon 11:33 AM CT

MU: SEE CHART GET CHAIN FIND STRATEGIES
Micron Technologies is seeing long-term call selling, which is apparently the option strategy of the day so far.

A trader sold 14,000 January 2015 20 calls for the bid price of $1.35, according to optionMONSTER systems. This is a new position, as its volume was more than the strike's previous open interest.

Less than a minute later the largest block of MU stock traded as 490,000 shares were bought for $14 even. Combined with the calls, this creates a delta-neutral play that is looking for lower volatility. That means the trader is counting on shares staying in a range and/or less actual volatility than that implied by the call premium. (See our Education section)

MU is down 0.48 percent to $13.94 this afternoon. The memory-chip maker hit $15.07 last week, its highest price since 2006. Shares were below $6 at the October low.
Share this article with your friends


Related Stories

MU

Cramer: No surprise from Micron

June 29, 2015

What did people think would happen? Some sort of magical return to the personal-computer market, a demand surge that would keep the Micron ball in the air?

Invest Like a Monster - San Antonio: October 9-10

TRADING WEEKLY OPTIONS

The fastest money in the market
View full report »

Premium Services

Archived Webinar

Education & Strategy

Real vs. Synthetic

We now know that there are two ways of creating a call position, a put position, and a stock position. We can simply use the actual real security or we can recreate it synthetically. We can create these positions in both long and short forms and this ability sets up an interesting scenario--an arbitrage!

View more education articles »