The $5 million bet on a Delta rally

Delta shares are up 18 percent from the February lows, but according to one savvy trader the airline stock is about to fly even higher.

On Thursday, when bullish trades outpaced bearish ones, the trader bet more than $5 million that Delta shares could rally 7 percent in a little more than a month.

In the large wager, the trader purchased 30,000 May 50-strike calls for $1.85. Since each call option accounts for 100 shares, this is a $5.5 million bet that Delta shares could rise above $51.85 by May expiration.

The bullish bet comes after a rough start to the year for the stock — Delta is down 7 percent in 2016 and traded around $47 on Friday.

"It makes sense to play Delta with options. It can really move around in a relatively short period of time. It's risking a small amount to make a lot" Optimize Advisors co-founder Mike Khouw said Thursday on CNBC's "Fast Money." Khouw noted that at one point earlier this year, the stock was down 20 percent, only to subsequently rally by nearly the same amount.

Delta shares were down more than 3 percent on Friday.

Meanwhile, analysts' estimates show an average price target of $64.14, with a buy rating.

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    Melissa Lee is the host of CNBC's “Fast Money” and “Options Action.”

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