From Leaders to Laggards: Is Memory Waiting on Micron?
Wednesday gave back Tuesday's gains. Rising yields hit high-multiple names first, and memory had run the hardest.
Micron reports after the close on September 30 (4 AM, October 1 in Singapore). Its own guidance for the quarter:
Revenue of $50 billion, plus or minus $1 billion
Gross margin of about 86%
Earnings per share of $31, plus or minus $1
The bull case is contracts. There are 16 take-or-pay agreements with about $100 billion in minimum revenue, and HBM4 is ramping twice as fast as HBM3E. There's also a catch in the calendar: this quarter runs 14 weeks, one more than the prior quarter.
The bear case is expectations. Fiscal 2027 earnings are already estimated at $156.53. Guidance language matters more than the quarter itself, and any softening on HBM pricing could trigger a sell-the-news reaction even on a beat.
How I trade it with sell puts
Blackout. Micron is inside my 7-day earnings blackout, so no new puts until after the print.
Volatility. Implied volatility usually collapses the morning after earnings. My IV-to-historical-volatility gate (at least 1.2×) often fails right then, so I wait for it to reset.
Strikes. A sell-the-news drop brings my two strike anchors together: the one standard deviation floor and the key moving average × 0.98. That's usually when a strike inside my 0.15 to 0.25 delta range becomes possible.
Size. One $1,000 put secures $100,000. Micron isn't on my core list, so it gets the 2% cap.
Correlation. Micron, SanDisk and SK Hynix fell together on Wednesday. I treat them as one trade.
Would a strong print end the pullback? Only if the guidance does. Let Micron speak first, then the rules decide.
Educational only, not investment advice. Options carry significant risk.
$MU $SNDK
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