Micron earnings hit Wall Street after the bell. This is how options traders are positioned in the report

At a freewheeling press conference on the White House lawn on Tuesday, President Trump shared the microphone with at least $15 trillion AI leaders, including Jensen Huang, Sundar Pichai, Greg Brockman, Dario Amodei and Elon Musk, talking about the future of what the president calls “super intelligence,” promising an economic boom unprecedented in history.

In the short term, the market must cope Micron gains. The good news is that options traders think it could be a breeze.

Market makers are forecasting a weaker 7% move for Micron on Wednesday after the bell, which is slightly lower than its four-quarter average move of 8%.

But for a stock that came to a screeching halt just three months ago when hedge fund Situational Awareness’ blowout cooled the AI ​​bull market, a more measured rally could be just what traders want.

Options flows at Micron were mostly bullish on Tuesday, with 61,000 calls likely bought versus 37,000 puts, and 75% of the total $1.6 billion in traded premium was linked to calls, according to Cboe LiveVol and SpotGamma data. Although call selling was also strong, it was primarily due to some heavy sellers of Micron’s 1,150-strike call, a bet that the stock would not exceed its implied earnings change, rather than a bet against the company.

According to Barchart data, roughly equal numbers of put and call contracts were open as of Monday’s close, near a one-year low for Micron’s put/call ratio.

“Unlike some of Micron’s past earnings, this is a more universally bullish dealer positioning,” said Jason DeLorenzo, owner and founder of Volland, a platform for analyzing options market structure. “They already have a lot of negative hedges that need to be unwound, so I think we’ll probably increase the price of the straddle.”

Open interest for puts between 980 and 1,000 is high enough that if Micron disappoints in earnings, the owners of these protective positions would take profits and provide support to the stock, according to DeLorenzo’s analysis.

Data from Opti-View, an options trading analysis website, echoes this analysis, showing 34,000 open puts at the 1,000 strike. The most popular strike for calls is at the 1200 level.

“If 1,150 broke, 1,300 wouldn’t be far behind,” DeLorenzo said.

What could hinder Micron?

Bond prices are selling off at the fastest pace all year, according to the 14-day RSI of iShares 20+ Year Treasury Bond ETF (TLT)and so in turn, rates skyrocket. Stock indexes other than small caps have managed to shrug this off, but higher rates could eventually have detrimental consequences.

“Even AI trading could be shaken by the bond market,” said Don Kaufman, co-founder of TheoTrade.