Range-bound play targets Micron
Chris McKhann | firstname.lastname@example.org
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.