Micron Technology, Inc. (NASDAQ:MU) is technically promising right now, and in fact, it could be due for a mega-breakout to the upside. Since Micron hasn’t had any worrisome fundamental developments, I like the opportunity to ride MU stock higher for free.

At the end of January, Micron stock actually started a break out of a descending lower-highs trend. Only the run hit resistance and faded into a three-week decline.

Last week, MU rekindled its run and now could be at in the beginning of a $5 rally, or 20%. I do have to note that the current open interest shows downside pressure, but the price action is so far ignoring it.

Instead of risking $25 per share buying the stock at current levels, I will resort to the options market for strategies. I prefer using options because there I can bend time to fit my thesis and leave room for error. (Buying MU stock outright puts my money at risk at a hard line with no room for error.)

How to Trade MU Stock

The Bet: Buy the Apr $26/$27 debit call spread. This is a bullish trade for which I paid 30 cents per contract to open. I need Micron stock to rally past my spread for an opportunity to more than double my money.

Usually I like to hedge my bet. In this case, I will lower my out of pocket expense. Chasing prices carries a lot of uncertainty; I am more certain of the value of what I am chasing but at lower prices.

MU stock may be iffy at $30 per share, but it’s is a bargain at $19.

The Bank: Sell the Jul $19 put. I collect 50 cents per contract to open. I need Micron to stay above my sold put to win. Otherwise, I am committing to owning shares at that price. The 25% price buffer gives me an 85% theoretical chance of success. For smaller accounts, this trade could be spread over $20/$19 credit put spread and yield 19% on money risked.

I don’t need MU stock to rally to its full potential to profit. If Micron stays above my sold put, any premium I recapture from selling the debit call spread would be pure profit.

I am not required to hold my position open through expiration. I can close it at any time for partial gains or losses.

Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @racernic and stocktwits at @racernic.