r/options
MU: $170M+ in vol bought today on an expiry that front-runs nothing. I'm fading it with a condor.
Author notes huge MU options flow before a non-earnings expiry, selling vol via an iron condor expecting a range-bound stock.
The tape: \~$100M into the $900 straddle (Jun 12), calls and puts same strike, both swept. Another \~$69M into the $950 straddle, same expiry. Near the money chain at 121% IV. MU last \~$935 after a 13.25% drop on 6/5 ($996 to $864 intraday) and a bounce.
121% IV is pricing a \~$103 move (\~11%) in three days. That's a number people see and assume binary event.
It isn't. Micron reports June 24. This expiry is the 12th. The flow is dead almost two weeks before the only scheduled catalyst that matters. So this is not earnings positioning, full stop. It's either an unscheduled catalyst nobody's named yet, or it's someone selling rich front month vol against the June 24 expiry and the herd is misreading swept symmetric flow as a buyer. Sweeps don't tell you the side.
Either way, buying this is the wrong end of the trade. At 121% IV with no event in the window, you're paying for $103 of movement that has no scheduled reason to show up, and time decay does the rest. This is a seller's setup.
The trade: iron condor, June 12. Short put \~830, long put \~805, short call \~1040, long call \~1065. Shorts sit at or outside the expected move, wings cap the loss, and the fat IV pays a real credit this far out. I collect as it decays and MU stays in range.
The one real risk is realized vol, not the headline number. MU printed a 13% day last week, so range isn't guaranteed. That's exactly why it's defined risk and sized small. The clean part: nothing short into earnings, since the 12th dies before the 24th.
For the condor sellers here: at this IV would you keep it symmetric, or skew the short strikes toward the side you're less afraid of given how this thing has been trading?
NFA
The part that actually matters for the fade is who is on the other side of that 170M. If those straddles were bought, the dealers are short gamma into the weekend and have to hedge against the move, which tends to dampen realized vol between now and the 12th. That is the tailwind for your condor, not just the IV staying rich. The risk is the exact thing you flagged: this flow is too early for the 24th, so someone is paying up for an unscheduled headline. Selling the condor is selling that tail. With the tape this jumpy I would size it as if the unscheduled move is the base case, not the edge case, because 121 percent front week IV with the catalyst two weeks out is the market telling you it does not trust the calendar.
He was assuming the position was short, so i assume you meant dealers were long gamma which would mute moves.
What’s happening on the 12th is SpaceX. Needs to be factored in to no events you mention. There were signs of a rotation today and it could be money getting sucked out of everything else to the IPO.
Thanks for this. Yeah I overlooked it.
I'd love to see Claude try and make this.
Really good stuff here… I might argue to look at the delta for your symmetry… which would drive your short puts down a bit more… like… 810? 815?
I think anytime I read “free decay” my alarm bells go off a bit, but this is all really interesting and well thought out. Mai have been selling tiny delta puts on MU and doing well myself.
Dumb question from someone just getting into options... Where can I find a good explanation of what you and OP are saying? Or is it an experience thing?
Not a dumb question. It's part vocabulary, part experience, and the vocabulary comes first.
For the concepts in this thread (IV, delta, expected move, skew, condors): tastylive's free archive is the best starting point and it leans toward exactly this premium-selling stuff. The r/options wiki/FAQ is solid too. If you want the real book, Natenberg's Option Volatility and Pricing is the standard, dense but worth it.
The part that's experience: reading flow and judging whether a print is a buyer, a hedge, or a spread leg. No book really teaches that, you build it by watching tape over time. But you can't read flow until the vocabulary is automatic, so start there. Paper trade a few condors before you put money on one.
Not sure why you are being downvoted, this post is 100% AI and of course OP is trying to promote some vibe coded flow thing in their profile. Looks just like the other dozen posted here this week
It all depends what your tradong plan is obviously. Agreed with the VOL being high, but it's OK to buy like a 15 wide call spread out of the money. Defined Risk and you don't need the stock all the way back .
I also have been doing Super Bull Spreads on exaggerated pullback.. like MU today. Selling a put spread to finance the out of the $$$ call spread. I also did one on SMH.
honestly this is something more people need to talk about. appreciate you putting it out there.
Np
I'd probably lean slightly asymmetrical rather than perfectly centered. After a move like the one MU just had, I'm usually more worried about another volatility expansion than a slow grind, so I'd give the call side a little more room if the credit still makes sense.
That said, the part I agree with most is focusing on realized vol instead of the flow narrative. People see big sweeps and immediately assume someone knows something. Sometimes they're right, but sometimes it's just positioning and IV ends up being the real story.
Straddle alımları genelde büyük bir hareket beklentisini gösterir. Hem yukarı hem aşağı yönlü potansiyel ciddi bir volatiliteye işaret ediyor. Eğer bu hareket gelmezse, opsiyon fiyatlarında beklenen düşüş, satıcılar için kârlı olabilir.
This sounds pretty nice to me. I guess time will tell. I’m too timid to get into trades thinking I know something as I’ve been burned before. But sounds like you’ve got more knowledge than most. I always assume vol is more or less fairly priced but is also more or less mean reverting. So if selling in high vol, go for it. Iron condor caps that tail risk. Will be a fun trade to watch. Cheers
You don't think this is Fed CPI related for tomorrow? I think CPI is going to come in real not even with cooked numbers. I also think private credit is hiding something real big in the iceberg. Someone is seeing the signs and adjusting accordingly. Earnings won't matter is it's a large bear market catalyst. Open AI wants to get the American taxpayer insurance and I think the ponzi scheme writing is on the wall. I don't think micron will realize any of their forward earnings for next year.
The only thing that scares me here is assuming no earnings = free theta. MU just proved it can move like a psychopath without earnings lol. 121 IV is crazy but realized has been crazy too. I’d probably skew downside a bit instead of keeping it symmetric.
I had to adjust a MU short that went from a bear put spread, to bull put spread, to broken iron condor to downside, to broken ic to the upside. So I say you can set it up neutral and adjust it to make it a broken wing ic/butterfly but it'll result in higher max loss for the adjustmemt.
Fading 121% IV condors on MU when the report is two weeks away is a structural trade. The point about dealer gamma hedging is crucial - if those huge sweeps were straddle buys, market makers are short gamma and their delta-hedging will act as a stabilizing force, compressing realized volatility before the 12th.
The main danger is the downside skew. MU can slide fast on macro headwinds (like the hot CPI print), so balancing the strikes by delta rather than raw dollars is a smart adjustment to avoid the puts getting tested too early. I track these block sweep orders and compute rolling correlations using a dashboard I run called AlphaSignal (https://alphasignal.digital). It helps to monitor whether the institutional flows are symmetric hedging or if there's a heavy directional bias forming in the order flow before setting up the wings.