From Leaders to Laggards: Is Memory Waiting on Micron?
Memory gave back Tuesday's gains on Wednesday. SanDisk fell 3.73%, SK Hynix 3.12% and Micron 2.22%. The selling carried on into Thursday's pre-market, then all three bounced on Friday as oil eased after the Trump–Xi meeting. They fell together and bounced together, so this is one trade, not three.
The real test is Micron's report after the close on September 30, which is about 4 AM on October 1 in Singapore. Wall Street expects $50.91 billion in revenue and $31.49 in earnings per share. Management guided about 86% gross margin, but also said price increases are moderating. The quarter also has 14 weeks, one more than usual.
Bull case: 16 take-or-pay contracts lock in about $100 billion through 2030. HBM4 has already shipped over $1 billion and is ramping twice as fast as HBM3E.
Bear case: Fiscal 2027 is already priced in, and Wells Fargo just cut its price target. At this stage the guidance counts for more than the beat.
My sell-put approach
Blackout: Micron is inside my 7-day earnings blackout. No new puts until the numbers are out.
Volatility: Implied volatility usually drops sharply the morning after earnings. I wait for my volatility gates to reset.
Strikes: A sell-the-news drop brings my two strike anchors together, the one standard deviation floor and the moving average × 0.98. That's usually when a strike in my 0.15 to 0.25 delta range becomes possible.
Size: One $1,000 put ties up $100,000. Micron isn't one of my core names, so it's capped at 2% of the account.
Would a strong print end the pullback? Only if the guidance says so. I let Micron report first, then let my rules decide.
Educational only, not investment advice.
$MU $SNDK
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
