MU, HPQ, AAPL Unusual Options Activity

August 12, 2021

Bloomberg GS Kostin interview

Click the Image above to see the Interview.


No doubt the S&P is trading well. “FANG” names, our leaders, were incredibly strong out of the gate this morning while there were some holes in a few other areas. 

Here’s Goldman Sachs David Kostin's take on the market. He’s definitely bullish but I find it interesting that behind the scenes Goldman unloaded a significant chunk of their private equity stakes (usually Growth names) last quarter. This is an interesting article that goes into it in more detail.  

This all made me revisit Value vs. Growth.

I thought these 2 charts (although a couple months behind) were interesting to look at. While Value has made a good move since the election, you can see Growth has dominated over the last decade.

Value vs. Growth Chart 1 year
Value vs. Growth Chart 20 years

The market can still go up if they take Value a lot higher and keep Growth moving up… just not as fast.

Anyways, some good eye candy for you to think about.

Here's 3 Unusual Options Activity trades that are interesting:

UNUSUAL OPTIONS ACTIVITY

1. Can the Market Go Up if THIS Sector Gets Crushed?

2. Put Buyer Getting Aggressive Here in This Name

3. Does THIS Chart Get Any Better?

Let’s get started...


UNUSUAL OPTIONS ACTIVITY MU

Can the Market Go Up if THIS Sector Gets Crushed?

Semiconductor Trade Idea

There was a negative research report out on Tuesday talking about an oversupply of DRAM chips that took MU down. It’s been trading down ever since. Morgan Stanley’s Semiconductor team must have made some calls because today they downgrade the stock from overweight to equal weight, saying:

“While we have been impressed by the structural improvements at the company, and we see limited downside, we see the stock as effectively rangebound in an environment where DRAM prices start to decline.”

The chart broke a key range here…

MU Stock Chart 081221

It doesn’t look pretty. And, so it’s not surprising to see Put buyers continue to press lower. 

MU Unusual Options Activity 081221

Looks like a roll down from the September $70 Puts to the $62.50 Puts. Yikes!

Semis are important to the overall market. It would be surprising to see the Semi sector collapse and the overall market scream higher. 

Just more food for thought.


UNUSUAL OPTIONS ACTIVITY HPQ

Put Buyer Getting Aggressive Here in This Name

HPQ Logo

Staying in that lane. Part of the reason given for an oversupply of DRAM chips is that the Computer companies pre-bought their inventory to meet the demand of personal computers last year. So, they aren’t buying this year, hence the oversupply.   

And speaking of Personal Computers, we have seen put buyers in HPQ lately. Late in the day yesterday, someone rolled up their September $30 Puts to the $32 Puts.

HPQ Unusual Options Activity 081221

But I am getting mixed signals on the chart… Looks decent to me, although at the top end of a range. 

HPQ Stock Chart 081221

Now, HPQ also has an enterprise business, which is apparently doing ok. So, which one is the market going to focus on?

When you figure that out let me know.


UNUSUAL OPTIONS ACTIVITY AAPL

Does THIS Chart Get Any Better?

aapl logo

Over the last 6 weeks, we’ve seen analyst after analyst get onboard the AAPL train. Today we have the Moness Crespi analyst reiterating his BUY saying: 

“For Apple, we expect the next notable event will be the unveiling of the iPhone 13 family and we believe it’s reasonable to look for Apple to attempt to reclaim its traditional slot of a September unveil after being interrupted by the COVID-19 crisis last year. Although we anticipate the updates with the iPhone 13 family to be incremental, we believe Apple has the wind at its back given 5G remains in the early stages of ramping.” 
Here’s what we’re looking at…
AAPL Stock Chart 081221

That is one good looking chart. A 20% move higher on the largest stock in the S&P500 with very little give back. And you know exactly where you should be lightening up. Perfect!

The traders out there are looking for a near-term breakout higher. You can see below…

AAPL Unusual Options Activity 081221

There are buyers of the AAPL August $150 Calls in good size. Seems a bit aggressive but they get a lot of leverage. By looking at the Open Interest, it could also be covering a short call position. Nonetheless, I personally like the AAPL October $150-$160 1x2 Call Spread for about $1.50.

Now go make some money!

Best,
Felix

THIS IS HOW THE TOP 1% TRADE OPTIONS

The Most Controversial Options Video

that the Experts Don't Want You to See!

Voted Top Presenter at the Benzinga Options Conference

Options Trading Tutorial - The Greeks Don't Matter