Semiconductor stocks have surged this year, with Micron Technology MU â€“ NASDAQ racking up gains of 45.6%.
Will this rise continue in 2017? Someone thinks so, and [yesterday] bought 7,500 MU July 22/29 bull call spreads for $1.68 apiece.
Bottarelli Research Translation: With a capital outlay of $1.26 million and a break-even price at expiration of $23.68, MU needs to increase 14.7% for this trade to pay off.
The stock is sitting at serious long-term resistance.
However, given the extended time horizon, thereâ€™s plenty of sessions for MU to break through and continue its march higher.
This trade maximizes its value at the short strike of $29 (+40.4%) wherein each spread would profit $5.32 or $3.99 million in total.
Source: Bottarelli Research