The shares of MBIA Inc. (NYSE:MBI - 12.96) extended their quest for new highs on Wednesday, topping out at $13.70 -- in territory not charted since early 2011. What's more, option traders are expecting a continued surge for the bond insurer, with speculators scooping up short-term, out-of-the-money calls.

By the time the dust settled, MBI had seen about 41,000 calls change hands -- close to five times its average daily volume, and more than four times the number of MBI puts exchanged. Most popular were the March 15 and 16 calls, which saw roughly 6,350 and 5,400 contracts cross the tape. The majority of the calls traded at the ask price, and open interest swelled at both strikes overnight, hinting at newly bought bullish bets.

More specifically, the 15-strike calls traded at a volume-weighted average price (VWAP) of $0.23, meaning the buyers' profit will increase the further MBI exceeds $15.23 (strike price plus VWAP) by the closing bell next Friday, March 15. Meanwhile, the VWAP of the 16-strike calls was $0.14, indicating a breakeven of $16.14 for the buyers. However, even if MBI fails to topple these markers -- both of which would mark four-year highs -- the most the buyers can lose is the initial premium paid for the calls.

That's not to say MBI's March-dated options are cheap, though. In light of the legal win over Bank of America Corp (NYSE:BAC), the stock's front-month options have grown increasingly popular. Reflecting the growing demand for the contracts is the equity's Schaeffer's Volatility Index (SVI), which now stands at 83% -- above 46% of all others of the past year. Just a week ago, the SVI rested at 66%.

In early trading, the shares of MBI are taking a breather, giving back 0.5% to explore the $12.96 vicinity. The stock's rally respite isn't too surprising, though, considering its Relative Strength Index (RSI) soared to 74 -- in overbought territory.