Unusual Options Activity: Micron (MU)

Semiconductor giant Micron (MU) has been hovering near all-time highs, even with the recent volatility in tech. One trader sees the potential for a move higher.

  • Special: Hidden Stock Under $5 Holds Tech World Hostage
  • That’s based on the April $98 calls. Expiring in 18 days, the trade is a bet that shares will move over 15 percent higher from their current price in the mid-$80 range. Over 11,000 contracts traded against a prior open interest of 116, for a 95-fold rise in volume.

    The option buyer paid $0.60 for the trade.

    Micron shares have gotten into the $95 range in the past few weeks, but a move to the strike price of $98 would be a new high for shares. Shares are up about 85 percent off the pandemic lows.

    In the past year, the company has seen revenues rise just 12 percent, although earnings are up nearly 64 percent. The recent chipmaking shortage is likely helping to hold up shares here.

  • Special: Hidden Stock Under $5 Holds Tech World Hostage
  • Action to take: While shares may not rally to $95, a move higher in tech in the next week or two could make for a huge return on this low-priced call option. Traders willing to bet on a pop higher should look to get into the trade with mid-double-digit profits in mind—and then look to get out quickly.