US OPTIONS FOCUS/Micron puts busy before earnings
CHICAGO, Sept 18 (Reuter) - Investors have been buying up Micron Technology Inc (MU) put options recently ahead of the company's quarterly earnings report scheduled for release Monday, traders said Thursday.
``A lot of people basically are buying October and selling September (options) because Micron is going to report earnings Monday,'' said Rob Kovell, a lead market maker in Micron options at the Pacific Exchange.
``So people are selling September to let that go out before the earnings and then they'll obviously be long the options going out,'' he said.
September options expire at the end of the week.
Kovell added that most of the activity was on the put side, suggesting investors are gearing up for a downside move in the stock.
According to First Call, analysts' consensus estimate for Micron's fiscal fourth quarter profit is $0.47 a share, up from the $0.09 a share earned in its 1996 fiscal fourth quarter.
In late trading Thursday, Micron shares were down 1/4 at 38-7/8 on consolidated volume of about 4.8 million shares.
The most active Micron option was the October 35 put, which traded about 7,775 contracts. It had open interest of about 4,800 contracts.
The October 45 put, which had open interest of 15,780 contracts, traded 1,805 and the October 40, with open interest of neearly 12,000, traded 1,025.
``There's mostly been a lot of put buyers over the last couple of weeks,'' Kovell said. ``October put buyers have been huge. Mostly I would guess there's speculation on the way the earnings are going to come out.''
Among Micron calls, the October 35 traded 6,920 contracts. It had open interest of about 1,200 contracts. The September 40 call traded 1,630 contracts and the October 45 call traded 1,225.
Kovell said implied volatility in the Micron October options was up near 70 percent. Over the last 20 trading days, volatility has averaged about 38 percent. |
