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U.S. OPTIONS/Micron vols creep up as stock
rallies
CHICAGO, Jan 7 (Reuters) - Implied volatility on Micron Technology Inc. (NYSE:MU
- news) options crept higher on Thursday morning as the stock rallied to a fresh record peak.
Traders noted brisk activity in Micron options on the Pacific Exchange and on the Chicago Board Options Exchange as implied volatility, a key factor in options pricing, rose to the top end of its recent range to about 70 percent for the January 65 contracts, traders said.
During the past month, options volatility has traded between around 60 and 69 percent, they said.
The stock was up 5-3/8 to 65-1/4, having scaled a new record peak at 66-1/4 earlier.
Traders linked the rise in the stock price and bullish options activity to a report from SoundView Financial Group, a brokerage that closely tracks the technology industry, which said it believed that one of the largest Asian manufacturers of dynamic random access memories notified its distribution customers that it was not accepting additional orders for 64-megabit DRAMs.
''That's bullish for Micron because it means that (Micron) can raise its profit margins,'' said one Chicago-based analyst who asked not to be named.
A market maker in Micron options noted good institutional activity as well as institutional sellers of deep in-the-money calls related to profit-taking. He noted sellers of January and July puts.
One of the biggest trades of the morning in Micron options, he said, was a April call spread in which the strike price was rolled to 55 from 50. Those contracts were among the most actively traded on the Pacific Exchange, as were the January
60 puts. |
