$MU calls double overnight

Bullish option traders have already doubled their money in Micron (MU) only one day after opening positions in the name.

Just yesterday, Market Rebellion’s tracking systems showed that 2,600 Weekly $45 calls expiring on Nov. 8 were bought for $0.95 to $1.19 with shares at $44.15. This was clearly fresh buying, as open interest in the strike was only 433 contracts before the activity appeared.

Those calls have traded for as much as $2.41 so far today, more than twice their purchase prices. The stock rose 5.73% at the same time, underscoring how quickly options can far outpace gains in their underlying shares.

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 4.05% to $46.47 in midday trading. The graphics chip maker rebounded after dipping with other semiconductors following weak guidance from Texas Instruments (TXN) in the post-market on Oct. 22.