Bulls double their money in $MU

Micron Technology is trading at its highest level since the dot-com era, returning big gains on bullish option positions.

On Dec. 26, Investitute’s tracking systems detected the purchase of 30,000 April $40 calls bought for $5.50 as part of a bullish roll with shares at $42.19. This was clearly a new position, volume was well above the strike’s open interest of 10,681 contracts.

Those calls traded as high as $12.43 today, more than twice their purchase price. The stock rallied 24.2% in the same time period, a large move but still well below 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 jumped 5.95% to close at $52.03 this afternoon, its highest price since 2000. The memory-chip maker, which is scheduled to report earnings on March 22 after the market closes, rose as the semiconductor space came back to life today.