Micron Technology (MU) – Trade Idea

Company Description

Micron Technology, Inc. is engaged in semiconductor systems. The Company’s portfolio of memory technologies, including dynamic random-access memory (DRAM), negative-AND (NAND) Flash and NOR Flash are the basis for solid-state drives, modules, multi-chip packages and other system solutions. Its business segments include Compute and Networking Business Unit (CNBU), which includes memory products sold into compute, networking, graphics and cloud server markets; Mobile Business Unit (MBU), which includes memory products sold into smartphone, tablet and other mobile-device markets; Storage Business Unit (SBU), which includes memory products sold into enterprise, client, cloud and removable storage markets, and SBU also includes products sold to Intel through its Intel/Micron Flash Technology (IMFT) joint venture, and Embedded Business Unit (EBU), which includes memory products sold into automotive, industrial, connected home and consumer electronics markets. Source: Reuters


Option Pricing

  • Implied Volatility (expected price movement) for short-dated options is 41%
  • Realized Volatility (historic price movement) for short-dated options is 48%
  • Implied Volatility Percentile for short-dated options is 13%

Trade Idea

MU incurred a 14% drawdown from its 1Y high ($51.39), which was realized on 9/11/19. In recent sessions, the stock has found support at previous swing lows. Tactical traders may be looking to buy the name at the lower end of its 3-month trading range. Strong 2-day price action may lead traders to believe that a reversal is likely to occur as the equity appears to be oversold. Short-dated options appear to be cheap with the IVP sitting in the 13 %-ile. As a result, one might want to consider the following trade structure if bullishly disposed: 

Buy115 Nov45Call

Break-even on expiration:

  • Losses of up to $1.90 between 45 and 46.90 with max loss of $1.90 below 45
  • Up to unlimited profits if share price goes to infinity. We haven’t seen that happen yet 🙂 


  • This trade idea risks 4% of the stock price with a break-even up ~7%

PnL Graph

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