$MU calls rack up gains at highs

Traders doubled their money as Micron Technology hit 52-week highs today.

On Oct. 25, Investitute’s proprietary programs cited the purchase of 10,000 January $43 calls for $2.57. The trade was part of a bullish three-way spread with shares at $40.62.

Those calls traded up to $5 this morning, just shy of twice their purchase price. The stock rose 14.9 percent in the same time period, illustrating the type of leverage that can be achieved through options.

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 popped 4.02 percent to close at $45.75 today after reaching a 52-week high of $46.75 this morning. The memory-chip maker issued strong guidance after beating quarterly estimates last night, drawing several analyst upgrades this morning.