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Unusual Options Activity In Micron Technology

Taiwan Semiconductor Manufacturing Company (TSM) is the world’s largest foundry, meaning they manufacture semiconductors.  This past Thursday they beat analyst estimates for sales for the quarter, but more importantly signaled a rebound from the current chip down cycle.

Memory chipmaker Micron Technology (MU) reported better-than-expected earning, increased its DRAM (dynamic random access memory) industry demand growth outlook for 2019 and say it expects demand to recover in the second half.

I’m no genius, but clearly these are clues that the semiconductor sector might be bottoming.  And what’s funny about making money investing in stocks, you don’t have to be a genius, just need to be able to connect the dots.  And if you can’t connect the dots, just follow what the Smart Money does because they have information at their disposable that you and I can only dream about.

On Friday, I noticed unusual options activity in Micron Technology. What’s interesting is these options are short dated, meaning they are going to expire soon.  What’s more interesting is these options only become profitable if and when Micron’s stock increase $10 or 22% over the next four weeks, meaning the Smart Money bought a little over 14,000 of the August 30th call options with a strike price at $55.

If the Smart Money is right, these call options have the potential to increase 5X. Will the Smart Money be right, stay tuned.

NOTE: funny how the strike price lines up with the monthly supply at $55.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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