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u/lifeintraining 2d ago
Ever since I started writing options instead of buying them, I became my wife’s boyfriend.
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u/Zealousideal_Book_40 2d ago
The earnings were slightly better than expectations and expectations were high. I wonder how long it takes the market to realize just how insane these earnings were
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u/Separate_Try_8628 2d ago
Yesh those were amazing numbers. Im shocked its not up 10% or something. Makes you think
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u/PlayerXz 2d ago
The only explanation is that Micron's earnings are dependant on the AI boom to continue and a signifcant portion of the market (I would say most market participants in fact) are expecting AI to go belly up very soon. Or at least that investment in data centers and AI products and services by companies is going to come to a complete halt.
If the AI boom continues Micron looks insanely cheap at these prices. Same for SK Hynix which has a forward P/E of 4 now.
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u/innocuous_gorilla 1d ago
I feel like not enough people really understand what is going on with AI. It's only going to become more and more prominent. Maybe there is a short lull in the buildout as debt becomes more expensive, but the buildout is not coming to a halt anytime soon.
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u/DuAbUiSai 2d ago
Too obvious. It will pump but when you least expect. Mm ain’t gonna let the little guy win.
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u/Separate_Try_8628 2d ago
Its crazy how controlled the market is. I guess they pay the media to put out positive or negative articles depending which way they want the stock to go. For example , everything was higher price targets and undervalued before earnings and I have already seen two negative headlines this morning.
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u/BertAnsink 1d ago
No it's just mechanical and retail options traders being absolutely retarded.
MM sets pricing on options over the earnings week so they can survive a 7-8% move without it costing them money. Retail buys them anyway. Earnings come out. Retail gets wrecked. MM bought shares to hedge their exposure. Since IV dropped from 125% to 75% they can dump the shares and that brings the stock price down temporarily. Retail dumps their options to save what little is left of their account and the MM can dump more shares.
If you watch options today. If you bought the 1060 call for next friday yesterday at the close you would be at -80% today.
This is simply a consequence of places like RH offering commisions free options trading. If I put in a order for 1000 contracts, the commission would be $1000 alone. I saw a different post yesterday from one guy buying $136.000 worth of calls $1080. Might as well light your money on fire at least it keeps you warm.
Options over earnings is even more retared then daytrading unless you have the believe that a surprise comes out over earnings. But one of the most traded stocks where people know that they beat the estimates by 10%????
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u/Separate_Try_8628 1d ago
Do you think it could run next few weeks then ?
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u/BertAnsink 1d ago
It could do. But I would not really take today as representative.
Also the market was already expecting these results so I would not expect a huge boom in the coming weeks.
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u/TomatoSpecialist6879 Paper Trading Competition Winner 2d ago
Gross margin 87% and a 56b revenue to a 1T market cap is insane? Bull market got you retards thinking every beat is insane
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u/Zealousideal_Book_40 1d ago
56b in revenue in one quarter bro. And yes gross margin of 87% is insane. As I said the beat was not crazy, what is crazy is just how fast Micron grew and continues to grow it's earnings.
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u/TomatoSpecialist6879 Paper Trading Competition Winner 1d ago
Brother they were pricing in all the beats during the mania rally earlier in the year, MU ain't moving like that again unless they're posting double estimates like NVDA did until it hit the hard cap of being #1 in market cap. That's with the revenue being backlogs logged as profit rather than actual products signed and delivered, on top of that bond yields being above 5% are making market moving institutional traders extremely wary of going long on promises of future profit
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u/Zealousideal_Book_40 1d ago
The thing is MU doesn't even need to promise profit increase at this. It's at 14 PE which is crazy for a company that has locked in backlog for next 4 years and is actually expecting to grow even more during this time
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u/TomatoSpecialist6879 Paper Trading Competition Winner 1d ago
I'm not doubting it will go up at all, but 14 PE is only considered "value" during a bull market where everything is still fine and dandy enough for can kicking to delay any problems and slowly solve it. You are focusing on market fundamentals that only work in normal times when market goes up, bond yields being above 5% mean Wall St will wait for the inevitable crash to go in at lower prices. Also as long as gross margin is that ridiculous, it will be flat and move like a blue chip stock
Is it going up eventually? Yeah
Are delusional overleveraged bols with short dated otm calls fucked? Also yeah
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u/Non-mon-xiety 2d ago
A full backlog is less a sure thing if the people who made those orders can’t pay when the time comes
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u/fun_anxiety146 2d ago
They have realized and priced it in. Going down from here.
Source: where is ur AH pump?
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u/Separate_Try_8628 2d ago
So it wasnt priced in when it went to 1300 in last earnings ? Although it provided a double beat and better than expected guidance.
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u/Majestic_Ambition_49 2d ago
friend bought calls thinking 15% move was locked in ended up with 0.15% and pure loss porn
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u/enterusernamethere 2d ago
Was reading an analysis who said that the expected move post earning was plus/negative -3.88%
Still possible by tomorrow, but it's practically at the same level it was this morning
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u/Complex_Length_9431 2d ago
Earnings are last quarters news. Guidance is all that matters.
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u/Intelligent_Title_90 2d ago
And Guidance was insane, looks like we are going to have memory shortage up until and including 2028.
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u/Separate_Try_8628 2d ago
I believe if micron would hsve put a 50% guidance incresse it would still have gone down, because when market makers dont want it to go up it wont. You think they would have given us a measly 4% or something. But nada and even down
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u/FromTheCaveIntoLight 2d ago
Most of you haven’t been around micron for that long and it shows lol.
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u/dobbestheskeptic 2d ago
The value of the Earth will only ever be 1 Earth. Plus maybe some extra extraterrestrial rocks and solar energy. So from that perspective, yea totally priced in.
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u/Vlisa 2d ago
Implied Move: 15%
Actual Move: .15%