$MU bulls double their money

Micron Technology (MU) topped quarterly estimates, turning quick profits on upside option positions today.

On June 18, Investitute’s proprietary programs found that 4,000 Weekly $35 calls expiring on July 5 were bought as part of a bullish spread for $1.30 to $1.34 with shares at $34.14. This was clearly a new position, as volume was well above the strike’s previous open interest of 1,261 contracts.

Those calls traded up to $2.91 today, more than twice their purchase price. The stock rose 9.87% in the same time frame, illustrating the kind of leverage that can be achieved with options.

It is the second winning trade in the name posted on Investitute in barely a week.

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 has jumped 13.62% to $37.13 in late afternoon trading. The memory-chip maker’s earnings beat expectations after the market closed yesterday.