Traders cashed in hedges at last week's low and put $46M into Micron calls

Last Thursday, Nov 5, was the week's crash day: the S&P proxy fell about 4.4%, Micron about 17.5% and Sandisk about 22.3%. The biggest money in options flow data that day and the next was not betting on more pain. It was cashing in protection near the low, and then buying Micron. On Nov 6, with Micron near $689, three blocks of January 2027 $600 calls traded within two minutes for about $46.2M, about $36.3M of it at the ask. At about $138 a contract, those calls need Micron above about $738 at expiry to pay off. Micron trades near $826 Wednesday, up about 13.9% on the day as memory stocks rebound.

The biggest bets

Micron calls: the three blocks added up to about 3,350 contracts, and open interest rose from about 5,030 to 6,830 the next morning, so roughly half opened new positions. Deep in-the-money calls like these move almost one for one with the stock, which makes them a cheaper stand-in for shares. The contracts last traded near $240 Wednesday.

Micron puts: at 10:26 AM ET on Nov 5, 2,000 February 2027 $700 puts sold for about $19.4M, mostly on the bid, with the stock near $691. Open interest fell by about 685 contracts overnight, so part of it was old puts being sold, a day after about 2,700 of the same contract were bought at an average of about $52. If the rest were new sales, the sellers keep the premium as long as Micron stays above about $603 into February.

S&P proxy puts: at 4:11 PM ET on Nov 5, someone sold 10,000 deep in-the-money November $790 puts on the bid for about $57.4M, and open interest fell from about 6,090 to 13. That is a hedge being cashed in at the close of the worst day, not a new bet.

Sandisk puts: at 10:12 AM ET on Nov 5, a buyer paid about $15.3M for 1,927 November 20 $870 puts, mostly at the ask, with the stock near $865. Open interest jumped from 210 to about 2,140, so this was new protection. Sandisk closed that day near $806, about $16 above the puts' breakeven of about $790, then bounced. It trades near $1,010 Wednesday, up about 17.5%, and the puts last traded near $17, against about $80 paid.

Nvidia into its Nov 17 report: on Nov 10 a buyer swept 10,000 December $165 puts at the ask for about $11.7M with the stock near $167, and another paid about $11.1M for June 2028 $170 puts. On Wednesday, about $8.2M of June 2027 $175 calls went at the ask with Nvidia near $176. The money is split, which fits a stock heading into a big report after falling from about $207 to $169 in five sessions.

Insiders and funds

Form 4 filings this week were mostly sales. Director Ronda Stryker sold 550,000 Stryker shares near $325 on Nov 6, about $178.9M. Royal Caribbean director Arne Alexander Wilhelmsen sold about 470,600 shares from Nov 6 to Nov 10, about $157.8M. Arista co-founder Andreas Bechtolsheim sold 520,000 shares on Nov 5 and 6, about $86.9M, under a pre-set trading plan. The notable buy was small but direct: Rockwell Automation CEO Blake Moret bought 4,000 shares near $386 on Nov 9, about $1.5M, in the open market. Insiders sell for many reasons, so the sales say less than the buy.

Reading the flow

Big trades are often hedges, and this week shows the other half of that: hedges get closed too. On Nov 5 the ratio of put to call volume across all listed options hit about 1.03, the only day above 1 in the past eight sessions, and it was back to about 0.88 by Nov 10. Selling deep in-the-money index puts at the close, and selling Micron puts that may have been bought a day earlier, is what holders do when protection has done its job. The Nebius trade is a reminder of how hard flow is to read: about $14.1M of November $115 puts were bought at the ask as part of a multi-leg order on Nov 5, ahead of its Nov 12 report, yet open interest fell by about 1,550, so it looks like old positions being closed. Nebius is up about 18.2% Wednesday. Flow is a clue, not a signal. What would confirm the read is Micron holding above about $738, the calls' breakeven, after the Nvidia report; a drop back toward $690 would turn last week's hedge sellers into the early ones.

What X is saying

Posts tie Wednesday's memory rally to CoreWeave's results. One trading account wrote that memory stocks jump as CoreWeave results lift AI sentiment, and the fund company behind a memory ETF posted that Micron, Seagate, Sandisk and Western Digital are among its top holdings. Not everyone is convinced: one account is waiting for what it calls a dead cat bounce to end in memory, and another says Nvidia lags after a Baird downgrade.