Option bulls are flocking to MBIA Inc. (NYSE:MBI - 12.64), which rocketed to a new annual high of $12.93 on the heels of a courtroom victory. At last check, the bond insurer has seen roughly 23,000 calls cross the tape -- more than five times its average intraday volume, and about three times the number of MBI puts exchanged.

Most active by a mile is the March 13 call, which has seen close to 7,000 contracts change hands at a volume-weighted average price (VWAP) of $0.60. The majority of the calls have crossed on the ask side, and volume has exceeded open interest at the front-month strike, hinting at newly bought bullish bets.

In order to profit on the play, the buyers need MBI to muscle north of the $13.60 level (strike plus VWAP) by the close on Friday, March 15, when the options expire. Currently, delta on the calls stands at 0.46, suggesting options traders are giving the contracts a 46% chance of moving into the money. For comparison, the calls' delta stood at just 0.13, or 13%, on Friday. However, even if MBI doesn't extend today's quest for new highs, the most the buyers can lose is the premium paid at initiation.

Even before today's bullish gap -- which temporarily halted the stock -- options traders were optimistically aligned toward MBI. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), investors bought to open more than three MBI calls for every put during the past two weeks, as evidenced by the stock's 10-day call/put volume ratio of 3.24. Likewise, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.54 indicates that calls nearly double puts among options with a shelf-life of three months or less.

Since touching the aforementioned peak of $12.93, MBI has trimmed its lead to 22.6%, with the shares last seen in the $12.64 neighborhood. Bolstering the security was a favorable court ruling in New York, after the bond insurer won a dismissal of Bank of America's (NYSE:BAC) lawsuit regarding its 2009 restructuring.