Medicines fell after losing a court ruling on Friday, and buyers jumped in.

optionMONSTER's Heat Seeker monitoring system detected the purchase of almost 3,000 October 33 calls, first for $2.25 and then for $2.55. Volume was almost 60 times the previous open interest at the strike, indicating that new positions were initiated.

These long calls lock in the price where shares can be purchased in the maker of injectable drugs. That gives investors the potential to generate significant leverage if it climbs while limiting the amount of capital at risk in the event of further downside. (See our Education section for more on how options can be used to manage trades.)

MDCO fell 7.26 percent to $31.56 on Friday. The decline came after a court in Delaware ruled against the company and in favor Teva Pharmaceutical Industries in a patent case. As a result, the company's Angiomax drug may face generic competition in 2015 rather than 2019, according to Investor's Business Daily. At one point MCDO was down more than 10 percent yesterday.

Quarterly earnings have beaten expectations the last two quarters, and the next set of numbers are due on July 24.

Overall option volume was 9 times greater than average in the session, according to the Heat Seeker. Calls accounted for more than two-thirds of the total.


More From optionMONSTER

• Huge long-term wager on Achillion
  

• Traders position for Exco breakout
  

• Show of support for Vertex Pharma