Bulls turn quick gains in $MU

Option traders doubled their money on upside positions in Micron today.

On Jan. 24, Investitute’s proprietary programs flagged the purchase of 3,000 March $45 calls for $0.35 to $0.43 with shares at $37.09. Volume was far above the strike’s previous open interest of 1,867 contracts, indicating that this was fresh buying.

Those calls traded for $0.72 this morning, twice their initial purchase price. The stock rose 8.57% in the same time frame, illustrating the kind of leverage that can be achieved with options. It is the second winning trade in Micron posted on Investitute in as many weeks.

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 spiked to $40.33 early this morning before pulling back to close at $39.37, off 0.25% on the session. The memory-chip maker has rebounded sharply with the rest of the semiconductor space this year.