r/options
Micron earnings Tuesday and the bar feels insanely high, anyone else nervous?
Author stays flat ahead of MU earnings, citing high expectations, IV crush risks, and doubts on margin durability and HBM TAM growth.
ok so MU prints FY26Q3 on the 24th and the consensus numbers are kinda nuts.
revenue estimate sitting at 35.43B vs their own guide of 33.5B. thats up 281% YoY if you trust the street. gross margin pegged at 81.8%. net income est 23.66B which is like 1155% YoY growth lol.
been watching this name on moomoo for a few weeks and IV is at 114% with positive gamma stacking up. translation, dealers are basically capping the move unless something really breaks the script.
heres what i keep going back and forth on:
non AI memory pricing has been carrying a lot of the gross margin story. is that actually durable or are we one inventory build away from giving it back
2026 capex is reportedly headed north of 25B. every memory cycle in history has ended with someone overbuilding. why is this time different
they keep teasing the HBM TAM going from 35B in 25 to \~100B by 28. if mgmt doesnt raise long term HBM guide on the call i feel like the stock just bleeds regardless of the beat
honestly the setup reminds me of nvidia prints last year where you needed a guide raise AND a TAM raise just to hold the line. a clean beat wont cut it.
im flat going in. got burned chasing semis into prints before. anyone actually holding through? and if so are you playing shares or stretching it with calls given that IV crush is gonna be brutal
With IV this high, I’d rather own shares than pay up for calls unless I had very strong conviction on the call (which is not the case lol). Otherwise IV crush and profit-taking can easily outweigh a decent print.
Their forward PE is pretty low and they have a lock on DRAM unlike SNDK.
At 114% IV the chain is pricing a move in the high teens percent, so the real question is not direction, it is whether you clear the implied move plus the vol crush. Long single calls are the worst structure into a print like this because IV collapses the morning after and you can be right on direction and still bleed. If you want leveraged upside, a call debit spread is more honest here. The short leg you sell is just as inflated, so it funds a chunk of the crush instead of leaving you long pure vega. Shares sidestep the IV reset entirely and just take the directional bet. And your read on needing a guide raise plus a TAM raise is the right frame. When the implied move is this rich, a clean beat that only meets expectations usually still resolves lower because the premium sellers get paid.
What are are your thoughts on DRAM LEAPS which contains a quarter percent of MU. Im up 135 percent on June 2027 LEAPS calls for 80k strike. Bought at $11 per option and is now at $28 Im debating holding through this earnings and opening another higher strike position after earnings since the consensus is that theres a good chance of an IV crush. My thinking is my original position will recover well before the expiration since its more diversified than just MU.
It’s up 66% in the last month. Bring on the “correction”. Yawn. See you at 1500 in July.
One thing you can count on, the report will be scrutinized for any reason to drive the price down.
Isn't that the case with every earning for every company? 🤔
in 24 months whether you like it or not the value will be x3 higher easily. I have never seen such huge demand and limited supply
Wednesday?
More likely to drop than pop IMO
That might be why it pops. Expectations are negative pre earnings.
Hello regard, he means the memory components not the ETF
More likely to dump, but i’m still holding. Too poor to sell cc or i would with this IV
???
Valid points. I expect it to dip, which means I’ll buy more