--- title: "Pondered for two days about the 1870 large put options" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40130373.md" description: "I've been closely watching $Micron Tech(MU.US) for the past two days. It all started with that large order that leaked during the trading session on April 20th — 1,870 put contracts with a strike price of $420, expiring in December. At the moment the order was placed, the stock price was still at $463.89, but it closed at $455.07 that same day. The notional amount was roughly $14 million USD based on the opening price. This kind of scale isn't something retail investors can pull off. I've been pondering this order for two days, repeatedly thinking about one question: Is this a hedge, or a targeted bearish bet? Let's talk about the hedging possibility first. MU has risen too much this year, and institutions' unrealized gains on their holdings are already substantial..." datetime: "2026-04-23T09:45:20.000Z" locales: - [en](https://longbridge.com/en/topics/40130373.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40130373.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40130373.md) author: "[好柿花生Option](https://longbridge.com/en/profiles/27346521.md)" --- # Pondered for two days about the 1870 large put options I've been watching $Micron Tech(MU.US) closely for the past two days. It all started with that large order that leaked during the session on April 20th — 1,870 puts with a strike price of $420, expiring in December. When the order was placed, the stock price was still at $463.89, and it closed at $455.07 that same day. The notional amount was roughly $14 million based on the opening price. This kind of size is not something retail investors can pull off. I've been pondering this order for two days, repeatedly thinking about one question: Is this a hedge, or a directional bet on a decline? Let's talk about the hedging possibility first. MU has risen too much this year. Institutions holding positions have substantial paper profits. Placing an insurance lock at $420 below to secure profits is a completely reasonable move. This kind of operation is very common among U.S. stock institutions, especially as the memory cycle nears its peak, when hedging demand is naturally strong. If this is the logic, this order doesn't actually reflect a bearish view; it's just "enough gains, let's lock some in." But the more I look at it, the less it seems like a pure hedge. There are two things that make me think it might be more than just a hedge: First is the expiration date. December. This time frame usually means "I have a view to express," not "I need insurance for a few months." Institutions doing short-term hedges typically buy puts for the next month or the month after. The longer the time, the more expensive the hedging cost, so it's generally not chosen. Stretching it to December basically means "I'm betting MU will fall over the next 8 months." Second is the signal from the valuation side. MU's current P/E is 21.56x, significantly higher than its own historical median. You know the memory industry — its cyclicality is even more pronounced than Apple's. Once DRAM prices retreat from their peak, profits can halve quickly, and valuations can get cut in half along with them. At this valuation level, a bearish thesis isn't strange; what's strange is that people are still chasing it. **So my personal inclination is: Even if this is a hedge, there are simultaneously directional short funds in the market. In other words — regardless of whether those 1,870 puts are a hedge or not, at MU's current level, I personally don't dare to chase.** So how to participate? Follow or not? My view is to follow, but not all the way. Strategy: Buy $450 Put, Sell $420 Put, expiring May 16th, 23 calendar days. Why not go out to December? The reasons are practical. First, although the theta decay of long-dated options is slow, the cumulative time value erosion over 8 months is not insignificant. Second, I can't claim my judgment about MU's next 8 months is more accurate than big money's. I might guess the short-term moves, but I can't guess the long-term ones. So I'm compressing the window to one month, only targeting the move from the $460 pivot down to $420. The maximum loss for this structure is about $1,100 per spread, and the maximum profit is about $1,900 per spread. The risk-reward ratio is about 1.7:1. The specific premium is subject to the order price at the time of execution. My stop-loss is set at $466. The logic is — if MU doesn't fall but instead breaks above the previous $460 pivot and moves higher, it means the market's attitude towards this stock is not "topping" but "continuing to make new highs." Then this bearish thesis is directly wrong, no need to dwell on it. If the stop-loss is triggered, close half the position. Observe the remaining half for another two days. If it doesn't turn back, close it all. I'm limiting the position size to 2% of the account. I've always been conservative with this kind of order-following play because you're not the big money. You don't know when they'll close their positions; you're just hitching a ride. The driver of the ride might not notify you when they get off. I could also be completely wrong on the whole direction. A few possible counter-arguments: First, HBM demand continues to exceed expectations. HBM is MU's most profitable product line. If orders from NVIDIA/AMD/Broadcom keep increasing, MU's profit elasticity could outweigh the weakness in spot DRAM prices. Second, the next earnings guidance is super strong. MU's earnings report is usually at the end of June. By that time, my May options will have already expired, so I won't be directly wiped out, but the stock price might price in the expectations ahead of time and move within a month. Third, this batch of 1,870 puts might really be just a pure hedge, completely unrelated to any view. All my interpretations above are over-reading. So, this post is essentially me laying out my thought process, not telling you to copy my homework. With this kind of big-order-following play, the position size must be small. Don't take the four words "institutions are bearish" as your reason to go heavily short. I'm only allocating it 2% of my account this time — just enough for me to learn the rhythm of this big order and see how the market plays out over this month. ### Related Stocks - [MU.US](https://longbridge.com/en/quote/MU.US.md) - [AAPL.US](https://longbridge.com/en/quote/AAPL.US.md) - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [AMD.US](https://longbridge.com/en/quote/AMD.US.md) - [AAPB.US](https://longbridge.com/en/quote/AAPB.US.md) - [AAPD.US](https://longbridge.com/en/quote/AAPD.US.md) - [AAPU.US](https://longbridge.com/en/quote/AAPU.US.md) - [AAPX.US](https://longbridge.com/en/quote/AAPX.US.md) - [AAPY.US](https://longbridge.com/en/quote/AAPY.US.md) - [APLY.US](https://longbridge.com/en/quote/APLY.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [AMDL.US](https://longbridge.com/en/quote/AMDL.US.md) ## Comments (3) - **鱿鱼 · 2026-04-23T13:11:19.000Z**: Isn't selling a put to collect interest? It's just that the insurance won't fall to 420, and if it does, then exercise it. - **jiafei等待计划执行 · 2026-04-23T12:26:04.000Z**: Yesterday I sold two 570 calls expiring in March 2027, essentially betting that Micron's stock won't reach 570 by 2027. But no one is a god; if you're wrong, just close the position quickly. - **xiaoyang炒股养家 · 2026-04-23T10:09:01.000Z**: Substance King / Guru