U.S. stock futures are falling once again this morning. Volatility is rising, and investors are looking for stability. While overvaluation remains a major driver for the market’s current gyrations, inflation and rising bond yields are making stocks less attractive.

Meanwhile, the U.S. government is once again facing a potential shutdown tomorrow night. Last month, lawmakers passed an emergency spending bill to end the most recent shutdown, but that deal runs out tomorrow at midnight.

Against this backdrop, Dow Jones Industrial Average futures are down 0.19%, S&P 500 futures are off 0.32% and Nasdaq-100 futures have lost 0.85%.

Turning to the options pits, volume remained well above average with puts still in control. Overall, about 26.9 million calls and 28.1 million puts changed hands on the session. The CBOE single-session equity put/call volume ratio rose to 0.75. The 10-day moving average extended recent gains to hit another two-month high of 0.62.

Taking a closer look at yesterday’s options activity, Micron Technology, Inc. (NASDAQ:MU) call volume surged after boosting it’s quarterly outlook. Meanwhile, Microsoft Corporation (NASDAQ:MSFT) was also call heavy after announcing a plan to poach business from cloud storage rivals. Finally, Union Pacific Corporation (NYSE:UNP) was flooded with calls yesterday, despite a lack of any headline news.

Micron Technology, Inc. (MU)

Micron stock is holding up rather well amid the market volatility. Driving that strong price action, the company lifted its second-quarter guidance to $7.2 billion to $7.35 billion, up from its prior forecast of $6.8 billion to $7.2 billion. Earnings are now forecast to come arrive in a range of $2.70 per share to $2.75 per share, up from $2.51 to $2.65 previously.

The consensus is expecting earnings of $2.57 per share and revenue of $7 billion.

Options traders piled into Micron stock options following the news. Volume rose to over 301,000 contracts, or more than 1.3 times Micron’s daily average. Calls made up 77% of the day’s take.

Micron is expected to report 2Q earnings on March 22. Open interest for weekly March 23 options is extremely thin right now. The put/call OI ratio for the series is extremely bullish as a result, arriving at 0.20 as calls quintuple puts in March. Implieds are pricing in a 12% post-earnings move at the moment, with the upper bound at $49.30 and the lower at $38.70.

Microsoft Corporation (MSFT)

Microsoft is taking aim at business cloud storage users. The company announced yesterday that corporate users of Dropbox, Box and Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL) could use OneDrive for their online storage needs free for the remainder of their current contract. The only catch is that businesses must make a 500-user commitment to OneDrive to take advantage of Microsoft’s offer.

Cloud services have been a major driver for Microsoft revenue, and MSFT stock options traders appeared to view yesterday’s move positively. Volume rose to 259,000 contracts, with calls making up 70% of the day’s take.

That said, short-term Microsoft options traders remain conflicted on the shares. The February put/call OI ratio currently rests at 0.89, with puts and calls in near parity. As for options targets, peak February put OI totals 26,000 contracts at the $85 strike, while peak call OI numbers 34,000 at the $95 strike.

Union Pacific Corporation (UNP)

Union Pacific hasn’t found much favor among investors since it’s poorly received fourth-quarter earnings in late January. Rising fuel costs are expected to operating expenses, but the company remained positive it could address those issues.

There has been practically no headline-worthy news since this report, and yet UNP options went crazy yesterday. Volume skyrocketed to 523,000 contracts, or more than 22-times Union Pacific’s daily average. Calls were the culprit, making up 98% of the day’s take.

This type of call activity is typically a sign of dividend capture plays, but Union Pacific won’t pay its next dividend until late March, with the record date near the end of this month.

That didn’t stop some traders from sending a slew of block trades across the tape on UNP yesterday. According to Trade-Alert.com, two blocks of 137,000 contracts traded on the March $150 and $130 strikes yesterday. Both traded at the ask prices of 45 cents and $3.95, respectively. Several smaller blocks of 50,000 and 60,000 call contracts also traded on the January 2019 $130, $140 and $160 strikes.

Unfortunately, without additional information, it’s hard to tell what these traders had in mind, but a rally to $150 would be a 15% gain for UNP stock if these traders were bullish.

As of this writing, Joseph Hargett was long on Micron Technology, Inc. (MU) stock.