Micron Technology Options Chain Indicates Major Volatility Ahead
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Source: seekingalpha
- Price Volatility Expectation: Micron Technology (MU) shares dropped about 13% to roughly $1,060 in Tuesday trading, with the options chain indicating an expected move of approximately $139 by Friday expiration, reflecting high uncertainty ahead of the earnings report.
- Active Options Trading: Over 11,000 contracts traded for the $1,100 call option and nearly 10,000 for the $1,200 call, indicating sustained trader interest in a rebound despite the significant price drop already experienced.
- Demand for Protective Puts: The $1,000 put option traded more than 5,500 contracts with over 8,400 in open interest, suggesting investors are still paying high premiums for protection against further declines, particularly if earnings results disappoint.
- Strong Earnings Expectations: Wall Street anticipates Micron's Q3 EPS to be $20.28 on revenue of $35.25 billion, implying a 279% increase, indicating that despite market volatility, investors remain optimistic about the company's long-term prospects.
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Analyst Views on MU
Wall Street analysts forecast MU stock price to fall
26 Analyst Rating
24 Buy
2 Hold
0 Sell
Strong Buy
Current: 1211.380
Low
235.00
Averages
336.12
High
500.00
Current: 1211.380
Low
235.00
Averages
336.12
High
500.00
About MU
Micron Technology, Inc. provides memory and storage solutions. The Company delivers a portfolio of high-performance dynamic random-access memory (DRAM), NAND, and NOR memory and storage products through its Micron and Crucial brands. The Company's products enable advancing in artificial intelligence (AI) and compute-intensive applications. Its segments include Cloud Memory Business Unit (CMBU), Core Data Center Business Unit (CDBU), Mobile and Client Business Unit (MCBU) and Automotive and Embedded Business Unit (AEBU). CMBU is focused on memory solutions for large hyperscale cloud customers, and high bandwidth memory (HBM) for all data center customers. CDBU is focused on memory solutions for mid-tier cloud, enterprise, and OEM data center customers and storage solutions for all data center customers. MCBU is focused on memory and storage solutions for mobile and client segments. AEBU is focused on memory and storage solutions for the automotive, industrial, and consumer segments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Micron Technology Earnings Report to Impact ETF Market
- Broad ETF Holdings: Micron Technology is currently owned by 603 exchange-traded funds, collectively holding approximately 228 million shares, indicating that its earnings report could have a ripple effect across multiple technology and semiconductor ETFs.
- Strong Stock Performance: Year-to-date, Micron's stock has surged approximately 281.9%, although it faced a 10% decline on Tuesday ahead of the earnings report, reflecting the market's heightened anticipation for the upcoming results.
- Significant Earnings Impact: Investors are closely monitoring whether Micron can deliver strong earnings; a positive surprise could boost semiconductor-focused ETFs, while disappointing results may weigh on related funds.
- Key ETF Exposures: Major ETFs with significant exposure to Micron include GraniteShares 2x Long MU Daily ETF (98.65% allocation) and Direxion Daily Technology Top 5 Bull 2X ETF (28.94% allocation), meaning their performance will be directly influenced by Micron's earnings report.
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Global Chip Market Decline Leads Nasdaq Down Over 1%
- Market Volatility Intensifies: The Nasdaq index fell over 1% due to a global chip market downturn, reflecting investor concerns about future economic growth, particularly amid potential Federal Reserve interest rate hikes, which have negatively impacted market sentiment.
- Strong U.S. Stock Performance: Despite current market fluctuations, the S&P 500 is up nearly 8% year-to-date, and the Invesco QQQ ETF has risen 16%, indicating resilience in tech stocks, and long-term investors can remain optimistic in the context of an AI-driven bull market.
- Micron Earnings Expectations: Micron is expected to report Q3 sales of $35.25 billion, a 279% increase year-over-year, with net income projected to rise from $2.1 billion to $23.9 billion, reflecting a staggering 996% growth rate, showcasing strong performance amid surging AI memory demand.
- Key Role of High Bandwidth Memory: Micron's ramp-up of high bandwidth memory 4 (HBM4) is twice as fast as HBM3, and if significant revenue contributions are reported in the earnings, it will further solidify its leadership in the memory market and drive stock price increases.
See More
Micron Technology Options Chain Indicates Major Volatility Ahead
- Price Volatility Expectation: Micron Technology (MU) shares dropped about 13% to roughly $1,060 in Tuesday trading, with the options chain indicating an expected move of approximately $139 by Friday expiration, reflecting high uncertainty ahead of the earnings report.
- Active Options Trading: Over 11,000 contracts traded for the $1,100 call option and nearly 10,000 for the $1,200 call, indicating sustained trader interest in a rebound despite the significant price drop already experienced.
- Demand for Protective Puts: The $1,000 put option traded more than 5,500 contracts with over 8,400 in open interest, suggesting investors are still paying high premiums for protection against further declines, particularly if earnings results disappoint.
- Strong Earnings Expectations: Wall Street anticipates Micron's Q3 EPS to be $20.28 on revenue of $35.25 billion, implying a 279% increase, indicating that despite market volatility, investors remain optimistic about the company's long-term prospects.
See More
Dow Jones Rises for Third Straight Day Amid Market Volatility
- Market Performance Comparison: The Dow Jones Industrial Average has risen for the third consecutive day, demonstrating resilience compared to other major market indexes, while the Nasdaq Composite fell by 1.98%, indicating that traditional sectors are faring better amid market volatility.
- Chip Industry Turmoil: Micron Technology's stock dropped 11.2% around 1:30 PM ET, and warnings from Korean regulators about leveraged ETFs led to a 10% plunge in the Kospi index, triggering panic across the semiconductor sector and affecting overall market sentiment.
- Impact of SpaceX's New Service: SpaceX experienced volatility before the market opened but quickly rebounded by 8.2%, with its new service Starfall projected to bring a multi-billion-dollar valuation, although the exact size remains unclear, indicating optimistic market expectations for its potential impact.
- Positive Performance of IBM: IBM's stock rose by 4.8%, making it a key contributor to the Dow's gains, driven by optimistic analyst reviews of its data center business and a multi-year partnership with OpenAI, highlighting the ongoing competitiveness of traditional tech companies in emerging technology fields.
See More
US Stocks Volatile: Micron Drops 11%, SpaceX Rebounds
- Micron's Significant Drop: Micron Technology's stock fell 11.2% after South Korean regulators warned about leveraged semiconductor ETFs, triggering panic across the semiconductor sector, particularly affecting memory chip-related companies and dampening overall market sentiment.
- SpaceX's Reversal: Following the announcement of its Starfall cargo delivery service, SpaceX's stock rebounded from a 4% premarket drop to an 8.2% gain, with the market anticipating a multi-billion-dollar valuation for this new venture, despite the unclear potential size of the business.
- Dow Jones Strength: The Dow Jones Industrial Average gained for the third consecutive day, bolstered by IBM's 4.8% rise, as the company's multi-year partnership with OpenAI enhanced confidence in its data center business prospects amid a turbulent market.
- Increased Market Volatility: Despite the pressure on tech stocks, particularly the Nasdaq Composite's decline, the Dow's resilience indicates traditional sectors' strength during market turmoil, prompting investors to watch for the upcoming producer price index report to gauge future economic trends.
See More
Stocks Decline as Micron's Earnings Loom Amid Profit-Taking
- Market Trends: Stocks are trading lower on Tuesday, with the S&P 500 and Nasdaq facing back-to-back declines primarily due to a cooling off in AI and data center buildout trades, indicating a trend of profit-taking after significant gains.
- Micron Earnings Outlook: Micron is set to report earnings after the bell on Wednesday, with market participants keenly awaiting signals that demand continues to outstrip supply, which is crucial for maintaining investor confidence in the current market climate.
- DuPont Reverse Split: DuPont's 1-for-3 reverse stock split takes effect on Wednesday, aimed at aligning its per-share metrics with those of U.S. multi-industry peers, although this cosmetic change will not impact the intrinsic value of the investment.
- FedEx Earnings Expectations: FedEx is expected to report revenue of $24.04 billion and EPS of $5.96, with market focus on CEO Raj Subramaniam's comments and the earnings trajectory of the streamlined company following the spin-off of FedEx Freight.
See More
Micron Technology Earnings Report to Impact ETF Market
- Broad ETF Holdings: Micron Technology is currently owned by 603 exchange-traded funds, collectively holding approximately 228 million shares, indicating that its earnings report could have a ripple effect across multiple technology and semiconductor ETFs.
- Strong Stock Performance: Year-to-date, Micron's stock has surged approximately 281.9%, although it faced a 10% decline on Tuesday ahead of the earnings report, reflecting the market's heightened anticipation for the upcoming results.
- Significant Earnings Impact: Investors are closely monitoring whether Micron can deliver strong earnings; a positive surprise could boost semiconductor-focused ETFs, while disappointing results may weigh on related funds.
- Key ETF Exposures: Major ETFs with significant exposure to Micron include GraniteShares 2x Long MU Daily ETF (98.65% allocation) and Direxion Daily Technology Top 5 Bull 2X ETF (28.94% allocation), meaning their performance will be directly influenced by Micron's earnings report.
See More
Global Chip Market Decline Leads Nasdaq Down Over 1%
- Market Volatility Intensifies: The Nasdaq index fell over 1% due to a global chip market downturn, reflecting investor concerns about future economic growth, particularly amid potential Federal Reserve interest rate hikes, which have negatively impacted market sentiment.
- Strong U.S. Stock Performance: Despite current market fluctuations, the S&P 500 is up nearly 8% year-to-date, and the Invesco QQQ ETF has risen 16%, indicating resilience in tech stocks, and long-term investors can remain optimistic in the context of an AI-driven bull market.
- Micron Earnings Expectations: Micron is expected to report Q3 sales of $35.25 billion, a 279% increase year-over-year, with net income projected to rise from $2.1 billion to $23.9 billion, reflecting a staggering 996% growth rate, showcasing strong performance amid surging AI memory demand.
- Key Role of High Bandwidth Memory: Micron's ramp-up of high bandwidth memory 4 (HBM4) is twice as fast as HBM3, and if significant revenue contributions are reported in the earnings, it will further solidify its leadership in the memory market and drive stock price increases.
See More
Micron Technology Options Chain Indicates Major Volatility Ahead
- Price Volatility Expectation: Micron Technology (MU) shares dropped about 13% to roughly $1,060 in Tuesday trading, with the options chain indicating an expected move of approximately $139 by Friday expiration, reflecting high uncertainty ahead of the earnings report.
- Active Options Trading: Over 11,000 contracts traded for the $1,100 call option and nearly 10,000 for the $1,200 call, indicating sustained trader interest in a rebound despite the significant price drop already experienced.
- Demand for Protective Puts: The $1,000 put option traded more than 5,500 contracts with over 8,400 in open interest, suggesting investors are still paying high premiums for protection against further declines, particularly if earnings results disappoint.
- Strong Earnings Expectations: Wall Street anticipates Micron's Q3 EPS to be $20.28 on revenue of $35.25 billion, implying a 279% increase, indicating that despite market volatility, investors remain optimistic about the company's long-term prospects.
See More
Dow Jones Rises for Third Straight Day Amid Market Volatility
- Market Performance Comparison: The Dow Jones Industrial Average has risen for the third consecutive day, demonstrating resilience compared to other major market indexes, while the Nasdaq Composite fell by 1.98%, indicating that traditional sectors are faring better amid market volatility.
- Chip Industry Turmoil: Micron Technology's stock dropped 11.2% around 1:30 PM ET, and warnings from Korean regulators about leveraged ETFs led to a 10% plunge in the Kospi index, triggering panic across the semiconductor sector and affecting overall market sentiment.
- Impact of SpaceX's New Service: SpaceX experienced volatility before the market opened but quickly rebounded by 8.2%, with its new service Starfall projected to bring a multi-billion-dollar valuation, although the exact size remains unclear, indicating optimistic market expectations for its potential impact.
- Positive Performance of IBM: IBM's stock rose by 4.8%, making it a key contributor to the Dow's gains, driven by optimistic analyst reviews of its data center business and a multi-year partnership with OpenAI, highlighting the ongoing competitiveness of traditional tech companies in emerging technology fields.
See More
US Stocks Volatile: Micron Drops 11%, SpaceX Rebounds
- Micron's Significant Drop: Micron Technology's stock fell 11.2% after South Korean regulators warned about leveraged semiconductor ETFs, triggering panic across the semiconductor sector, particularly affecting memory chip-related companies and dampening overall market sentiment.
- SpaceX's Reversal: Following the announcement of its Starfall cargo delivery service, SpaceX's stock rebounded from a 4% premarket drop to an 8.2% gain, with the market anticipating a multi-billion-dollar valuation for this new venture, despite the unclear potential size of the business.
- Dow Jones Strength: The Dow Jones Industrial Average gained for the third consecutive day, bolstered by IBM's 4.8% rise, as the company's multi-year partnership with OpenAI enhanced confidence in its data center business prospects amid a turbulent market.
- Increased Market Volatility: Despite the pressure on tech stocks, particularly the Nasdaq Composite's decline, the Dow's resilience indicates traditional sectors' strength during market turmoil, prompting investors to watch for the upcoming producer price index report to gauge future economic trends.
See More
Stocks Decline as Micron's Earnings Loom Amid Profit-Taking
- Market Trends: Stocks are trading lower on Tuesday, with the S&P 500 and Nasdaq facing back-to-back declines primarily due to a cooling off in AI and data center buildout trades, indicating a trend of profit-taking after significant gains.
- Micron Earnings Outlook: Micron is set to report earnings after the bell on Wednesday, with market participants keenly awaiting signals that demand continues to outstrip supply, which is crucial for maintaining investor confidence in the current market climate.
- DuPont Reverse Split: DuPont's 1-for-3 reverse stock split takes effect on Wednesday, aimed at aligning its per-share metrics with those of U.S. multi-industry peers, although this cosmetic change will not impact the intrinsic value of the investment.
- FedEx Earnings Expectations: FedEx is expected to report revenue of $24.04 billion and EPS of $5.96, with market focus on CEO Raj Subramaniam's comments and the earnings trajectory of the streamlined company following the spin-off of FedEx Freight.
See More
