Thursday’s Vital Data: Apple Inc. (AAPL), Kraft Foods Group Inc (KRFT) and Micron Technology, Inc. (MU)

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The major market indices closed sharply lower on Wednesday, with the Nasdaq taking a 2.37% beating to lead losses on Wall Street. The nosedive in stocks led to a resurgence in put volume on the CBOE, as the exchange’s CBOE put/call volume ratio held at a reading of 0.69.

Technology stocks remained in focus for options traders, with Apple Inc. (NASDAQ:AAPL) and Micron Technology, Inc. (NASDAQ:MU) among Wednesday’s most actively traded options, while Kraft Foods Group Inc (NASDAQ:KRFT) made an unusual appearance on the list following a merger deal with H.J. Heinz.

Thursday’s Vital Data: Kraft Foods Group Inc (KRFT), Apple Inc. (AAPL) and Micron Technology, Inc. (MU)

Kraft Foods Group Inc (KRFT)

Shares of Kraft Foods rocketed more than 35% higher yesterday following the announcement of a deal to merge the company with H.J. Heinz and create the world’s fifth largest food company. The deal was the brainchild of billionaire investor Warren Buffett and 3G Capital Partners Inc., and is valued at around $36 billion.

The deal drove KRFT options activity to record levels on Wednesday, with more than 103,000 contracts changing hands on the issue. The majority of this volume crossed on the call side, with the June $67.50 strike emerging as top dog in terms of open interest, totaling 17,902 contracts. At this point, the vast majority of KRFT options activity could likely be centered around merger arbitrage strategies and traders looking to get in on the merger via short-term call options.

Apple Inc. (AAPL)

Despite shedding more than 2.6% on the day, shares of AAPL still managed to garner an analyst upgrade on the session. Brokerage firm Vetr lifted its rating on the stock to “hold” from “sell” on Wednesday, issuing a price-target of $126.11 on Apple stock. Overall, AAPL currently sports 39 “buy” ratings, nine “holds,” one “sell” rating and a consensus price target of $145.

The recent tech-sector weakness has done little to flag bullish activity in the options pits for AAPL stock. Shares continue to be the most popular among options traders, and Wednesday saw more than 994,600 contracts change hands, with 64% of that volume crossing on the call side.  The weekly March 27 series (which expires at the close tomorrow) remains the most popular among AAPL traders, with the March $127, $128 and $130 call strikes sporting open interest of more than 30,000 contracts each.

In premarket trading, AAPL stock is headed lower once again, down roughly 1% at last check.

Micron Technology, Inc. (MU)

Semiconductor concern Micron Technology was also the target of analyst activity on Wednesday. Brokerage firm MKM Partners initiated coverage on MU stock with a “neutral” rating and a $33 price target. According to MKM, MU faces flagging PC sales and slowing growth expectations for its DRAM and NAND businesses.

MU stock options traders appeared to adopt MKM’s bearish stance on Wednesday, with 57% of the 147,415 contracts in volume trading on the put side of the tape. These puts may be smart money on MU at this point, with the stock shedding nearly 5% on Wednesday while trading down another 4% in premarket activity this morning. Peak put open interest for MU currently rests at the deep-in-the-money weekly March 27 series $28.50 strike, with more than 18,600 contracts in residence.

As of this writing, Joseph Hargett did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/03/thursdays-vital-data-kraft-foods-group-inc-krft-apple-inc-aapl-micron-technology-inc-mu-options/.

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