In my look at Micron Technology, Inc. (NASDAQ:MU) from late September, I opined that the three successive upgrades of Micron stock were likely only the beginning.

After Evercore ISI and Susquehanna raised their price targets and Goldman Sachs upped its stance on Micron stock to an outright “Buy,” it became much easier for others to follow suit. As they did, it would only fan the bullish flames.

That’s pretty much how it played out, too.

In the same way the market was underestimating Micron then (yet analysts had been mostly hesitant to do anything about it), that pendulum has now swung too far in the other direction.

That is to say, between KeyBanc’s increased price target — from $53 to $65 — and some unsolicited bullish comments from Susquehanna (not to mention bullish comments about Micron stock from Goldman Sachs) all materializing just this week, the strong surge from shares looks and feels a bit artificial.

That’s the gentle way of saying this emotionally charged, fear-driven rally from Micron stock wasn’t built to last.

The Pile-On

For the record, here’s my exact assessment from September:

“And here’s the interesting part about the recent comments and upgrades from analysts: The three upgrades and upped price targets discussed above still don’t reflect the majority opinion, leaving the door open to even more price-lifting upgrades in the near future… While MU went through a wave of upgrades early this year, the analyst community has been relatively quiet since then. Goldman, Evercore and Susquehanna may have gotten that ball rolling again.”

It doesn’t take a trading veteran long to look at the chart of Micron stock below and realize there’s something technically unusual about the 37% romp in just the past four weeks.

Let me be clear, then, and say what everyone else is too afraid to say: This massive move has taken shape almost entirely because of investors’ fear of missing out (FOMO). It’s gotten so big, in fact, that now analysts are experiencing a fear of missing out. The end result is an amazing but ultimately flawed advance that can and likely will invite a strong wave of profit taking.

The irony and counterargument is, even with the big move, Micron stock is only trading at a trailing P/E of 8.6 and a forward-looking P/E of 6.3 — still undervalued by most any standard.

The flaw in that counterargument is, MU stock has been valued at a single-digit P/E (forward and backward) for quite a while now. It’s only mattered in earnest, for some reason, in the past few weeks. Sorry, but this isn’t a value-based bullishness now. This is one ultimately rooted in regret.

That’s generally not the kind of foundation that keeps a rally going.

A Cheap Way to Play Both Possible Outcomes

Still, while the FOMO-inspired move may be ultimately doomed, awareness of the flawed reason for a big gain isn’t exactly a surgically precise trading instrument. It only sets the stage.

The actors — traders — still choose when they take to the stage. Besides, there’s always the chance this rally doesn’t die. The market’s already proven it can defy the odds and common sense for months on end.

With that as the backdrop, if you simply can’t let go of any long Micron trade you may have here, I’ve got a solution. You can hedge your bet with some cheap put options — the cheaper the better.

The crash course on options: An equity option is the right to buy (call options) or sell (put options) 100 shares of a particular stock at a particular price before a particular date. If you own the option, you don’t have the obligation to buy or sell, just the right to do so, if you want.

Most traders don’t even buy or sell shares by exercising their options. They usually just sell their puts and calls to another trader after it’s gained value.

An example will help.

Let’s hypothetically say we expect MU stock to pull back to the $45 area at some point within the next three months. To capitalize on that possibility, you could purchase the July 45 puts at a cost of only $192 per 100-share contract.

This contract gives you the option of selling 100 shares of Micron stock on or before Jul. 20 at a price of $45, even if shares are trading at less than $45 at the time. (That’s where the value of an option comes into view.)

Again, you don’t need to bother buying or selling the stock — you can just sell the option for a gain.

But how much could you sell it for? Most option-price modeling tools say the July 45 puts would be worth roughly $423 per contract in early May if Micron shares were valued at $44 then. Even as early as Apr. 7, though, if Micron shares were valued at $46.50, each contract would be worth $381, which is 98% more than your initial cost.

And you can buy as many contracts as you want. The best part of all is you get to keep your Micron shares but can shield yourself from at least part of any pullback. The worst-case scenario is your July 45 contracts expire worthless and unused because Micron stock has continued its incredible rally.

Bottom Line for Micron Stock

To be clear, this use of options — as a hedge — is a win/lose scenario. Either the purchase of the put options will be a bust as the stock edges higher, or the put options will increase in value because Micron shares themselves are falling. As they say, there is no free lunch on Wall Street.

Thing is, it may be an expense that’s worth it to some traders. It just depends on your risk tolerance and the depth of your commitment to Micron.

You should also know that the example above using the July 45 puts was just that — an example. You’ll want to find a put option that better aligns with your expectations and your risk appetite.

Whatever the case, with Micron shares making an unusually overheated move, it would be a mistake to pretend it’s normal and do nothing to protect yourself from the inherent risk of such a scenario.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can follow him on Twitter, at @jbrumley.