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micron technology‘s rally after its monster earnings rise is almost over.
The memory chip maker’s shares traded as low as $1,023.65 on Monday, down 18% from Thursday’s 52-week high. Monday’s trading low is also nearly $25 below Wednesday’s closing price level, before Micron reported fiscal third-quarter sales that beat analysts’ expectations.
The sharp change in direction has fueled some bullish buying among Micron’s options traders, but overall flows across the sector are largely split depending on stocks or ETFs.
Micron Technology stock in the last 5 trading sessions
According to ThinkOrSwim data, call volume exceeded puts at Micron, but calls were more likely to be sold than bought. Of the $2.2 billion in premiums traded through midday Monday, $1.6 billion were related to calls, with seven of the top 10 calls expiring on Thursday, according to SpotGamma data.
of VanEck Semiconductor ETF (SMH) Despite Micron’s steep decline, it rose about 3% on Monday. seagate technology and western digital Added 8% and 10% respectively. The latter two stocks rose on the back of a bullish stance from Melius Research, which said both stocks could rise about 60% from their current prices.
Seagate and Western Digital’s call volume was nearly twice as much as their puts, but both companies had less than 40,000 total options traded. On Western Digital, where about 27,000 contracts were traded, 3,000 calls were bought compared to just 1,000 puts. The most popular contract by volume is a 700-strike call expiring on Thursday, trading at $8.50 and requiring a 10% appreciation to pay off.
SMH ETF flows are noticeably bearish, and have remained so for much of this summer, with puts trading at more than three times the volume of calls. Traders bought about 11,000 puts compared to just 3,500 calls.
SMH’s volatility is around 60, making it a good hedge compared to individual stocks, which still have the highest implied volatility in the market. The most popular contract on SMH is a 560-strike put that expires on August 21st.
Bulls remain Round Hill Memory ETF (DRAM)about 300,000 contracts were traded and more than twice as many calls as puts were bought. Still, more calls are being sold than bought, and even the excitement here may be fading some.
A bullish trader at DRAM sold 2,200 of the 80-strike puts expiring on Dec. 18 for $5.2 million and bought about 3,000 of the 40 puts expiring in June 2027 for $2 million, raising more than $3 million.
