$MU call prices quadruple

Option traders are logging big gains on upside positions in Micron (MU) today on positions opened last month.

On Oct. 23, Market Rebellion’s activity scanners flagged the purchase of 16,236 November $57.50 calls for $1.01 as part of a bullish roll, above the open interest of 4,322 contracts with shares at $53.28.

Those calls have sold for as much as $4.72 today, more than 4.5 times their purchase prices. The stock rose 16.67% in the same time period, a large move but nowhere near that of its options on a relative basis.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

MU is up 0.38% at $62.10 in afternoon trade today, setting fresh 52-Week highs. The memory-chip maker was noted in Barron’s this past week end as a cheap play on 5G and electric vehicles.