Investors are determined to make money betting in favor of Micron Technology, even if its shares drop.
optionMONSTER's Heat Seeker tracking system detected bullish activity in the chip maker throughout yesterday's session, with upside buying early and protection selling later. The first big trades occurred in the March 9 calls, with about 7,000 bought for $0.25.
About halfway through the afternoon much larger volume hit in the July 7 and July 5 puts. While that might normally be bearish, yesterday's trader sold the 7s for $0.52 and bought the 5s for $0.16 to create a put credit spread . Volume was more than 5 times open interest in both strikes.
The investor collected a credit of $0.36, which he or she will keep as profit if MU closes above $7 on expiration. Below that level the trader will be forced to buy shares for $7, with a maximum loss of $1.64 at the $5 level.
MU fell 0.72 percent to $8.28 yesterday but at one point touched a nine-month high of $8.55 before pulling back. The shares have been rallying along with other technology stocks, despite the company's last three earnings reports missing expectations. (See researchLAB for more)
The company is scheduled to appear at the Goldman Sachs Technology & Internet Conference at 1:20 p.m. today and three more events early next month.
More than 129,000 contracts traded in the stock yesterday, 6 greater than average.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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