Micron's stock options prep for bigger-than-average post-earnings stock move
Traders of Micron Technology Inc. stock options are preparing for a bigger-than-expected stock price reaction to fiscal fourth-quarter results, which are scheduled for release after Thursday's closing bell. An options strategy known as a straddle, which is a pure volatility play that involves the simultaneous buying of bullish and bearish options at the same at-the-money strike price, is implying a one-day move of 7.5% in either direction on Friday. The stock's average one-day post-earnings move has been 6.3% in either direction over the past 20 quarters, while the median move has been 7.1%. Over the past 20 quarters, the stock has gained ground 9 times for an average rise of 7.9%, and declined 11 times for an average drop of 5.0%. Micron's stock, which rose 1.3% in midday trading, has soared 50.3% over the past three months, while the PHLX Semiconductor Index has climbed 12.2% and the Dow Jones Industrial Average has tacked on 1.6%.
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