Unusual Options Activity: Micron (MU)

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  • Shares of Micron (MU) have trended up ahead of the company’s earnings report on Thursday. One trader sees shares continuing to move higher after earnings.

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  • That’s based on the February 2021 $85 calls. Over 15,940 contracts traded against a prior open interest of 608, making for a 26-fold rise in volume. The bet, expiring in 45 days, would need to see shares rise 9 percent to move in-the-money.

    Shares of the chipmaking giant are already at an all-time high after breaking through a large multi-year range between $40 and $60 starting as far back as 2018. So it’s possible to see shares continue to move higher as the chipmakers continue to massively profit.

    Action to take: We like this February option, which the trader paid about $3.00 for. It’s a bit short on the duration side, and traders might want to go out to March or April. However, given earnings on the company this week, this February option could lead to a quick profit that could then be put into a call option for Micron with a longer strike date to play the longer-term trend.

    Traders should look for high double-digit profits with this option, and may want to consider taking some profits off the table immediately after earnings if there’s a big jump.

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