Wow did this news, just minutes before the closing bell on a holiday shortened day, light up the board! After trading marginally higher for most of the day, shares of MU “fell off a cliff” following a report that a Chinese court had blocked sales in China of memory chip products made by the company. Micron has been caught in the middle of the growing trade war between the U.S. and China and last month Chinese regulators launched a probe into memory chip pricing. This was after MU announced in May, upside forward looking guidance and a huge share buyback program. And oh yeah, China accounts for more than 50% of Micron’s revenue. So how do you play this?
Well, first we wait and see what happens over the holiday and see where MU trades on Thursday. But with Implied Volatility sky rocketing today, option premium will be quite juicy and perhaps “ripe for the picking” when trade opens back up.
Happy 4th of July Everyone – have a wonderful and safe holiday.