Bulls post quick gains in $MU

Option traders nearly doubled their money overnight on bullish positions in Micron Technology (MU).

Just yesterday, Investitute’s tracking systems detected the purchase of 4,000 July $33 calls for $1.77 as part of a bullish spread with shares at $32.41. Investitute co-founder Pete Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $3.25 today, nearly 2 times their purchase price. The stock rose 7.56% at the same time, illustrating the kind of leverage that can be achieved with options.

Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.

MU is up 6.57% to $34.56 in afternoon trading. The memory-chip maker rebounded today on renewed hopes of progress on U.S.-China trade negotiations.