Micro Technology And Trying To Play It's Earning Report

First the companies five year chart. We all should have bought some last year.

Now it's one day chart.

Can you see like a twenty dollar swing interday? Guess what? Micron Technology has earnings coming out tomorrow, Wednesday September 30th. They are coming out after the closing bell. I want to show how the closest to the money "Puts" and "Calls" in one series of options closed today. The news isn't coming out until after the market closes so we are one day ahead of all this action. Now today's two closing readings. First the Calls and then the Puts. These are options will expire on Friday.

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Folks let's be honest. I would never trade in options this expensive. It is however interesting. The premiuma are so high because the stock so volatile. Now this, the stock did nothing on the day prior to it's earnings report coming out. It was up $.03.

So what happened? Good news.

Now this reaction to the earning results on Thursday morning. It's not what you might expect. The stock went up a touch on the opening but not enough to make the Calls go up because the premiums on the Calls were crazy high and then the stock started to sell off. Here is what it's opening chart looked like.

Now it's Puts. The stock is down right? Remember they closed at $37.97. These options don't expire until tomorrow so they are still crazy expensive.

The Call holders also didn't have much to cheer about. Remember the 1,065 series Calls that closed at $40.72? Now here they are at $8.00! The steam has come out of the exorbitant premiums this series of Calls once commanded.

So both the Call holders and Put holders lost. It's now 10:40 a.m. on Thursday. Would now be a good time to draw a line in the sand and try to play the Call options "just-in-the-money" back up again? Here is how much that would cost. This time we are looking at Calls with a striking price $15.00 less.

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Anything is possible however it is not a fun game to be playing. Look at where things were at on closing.

The 1045 Calls lost only $6.07 on the day. Image buying on the dip we showed back at 10:08 a.m. when the 1,060 Calls were trading at $8.00? Here is how they closed the day. They closed at $54.08.

A final recap. The earnings report was beyond unbelievably good. To see it drop in the first hour of trading was a real suprise. This is a good blog read over again two or three times. It carries some punch!