Paper bought 17500 MU Oct 12 calls & sold 17500 Oct 13 calls, paying a net of .52 for the spread.?
Micron Technology Inc., trading 12.78 (up .47) with an IV30 of 54 and HV10 of 33, has earnings in late June.? Activity is heaving today primarily in October today.? The stock has an ADV of 53000 contracts and an OI of 1493300.? Volume is on track to be 3X normal volume with almost all of it in calls where 115000 contracts have already trade.? The biggest trade was a closing call spread for a loss.?
A customer that was short the October 12/13 call spread closed the trade 175000 times.? The customer bought 17500 of the Oct 12s for 1.97 and sold 17500 Oct 13s at 1.45 paying a net of .52 for the call spread.? Based on the OI we are quite certain that this is a close and we see that this was done with stock.
The customer clearly thinks MU could keep rallying between now and July and has the potential to blow above 13.00 a share.? By covering the calls the trader was able to ensure that he or she only paid about half of the maximum value of the spread.? This trade should be considered bullish the underlying and slightly bullish volatility.? Other trades that are going up also seem to lean long volatility and the stock.