Micron Technologies (MU): Unusual Trading Activity

| March 27, 2012 | 0 Comments

Micron Technology Trading ActivityOptions in Micron Technologies (MU) lit up our tracking system Monday with a staggering amount of unusual trading activity.

Even though the stock closed down 1.8% to $8.25, that didn’t stop bullish option traders from coming in by the bus loads.

During Monday’s trading session, call options of Micron traded 250,000 contracts.  And that just about equals the amount of contracts open across every option strike in the entire company.

One of the larger option trades for the day was the purchase of the May $10 strike calls.  This was done 70,000 times for $0.14.  A total cost of $980,000.

I’m a fan of this options play.  It’s a good-looking speculative play.

Just keep in mind this is a true speculative position.  Micron must move quite a bit to the upside for substantial gains to be made.

But obviously option traders think it’s very likely!

If you don’t know, Micron Technology is one of the world’s leading providers of advanced semiconductor solutions. Through its worldwide operations, Micron manufactures and markets a full range of flash memory products.

And this eye-popping call buying is due to the continued advancement of a deal between Micron and Intel (INTC).

According to the deal, Intel will sell two of its NAND wafer factories to Micron for $600 million. Micron will pay half the amount in cash and the other half will be retained as an advance for future purchases.

What’s more, the deal will give Micron better margins.  Because MU will have full ownership of these factories, this deal will boost its capacity by as much as 30%.

I think this is what’s got option traders so excited!  Let’s wait and see!

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Category: Unusual Options Trading Activity

About the Author ()

Marcus Haber is the co-editor of Options Trading Research and boasts well over a decade of real-life options experience. Learning from some of the biggest names in the business, Marcus has served as an Options Strategist for a number of firms and was also appointed to the Options Advsiory Board with Pershing, a branch of the Bank of New York.