Traders are looking for medical-device manufacturer Volcano to rally in the next month.
More than 3,300 June 17.50 calls were purchased for $0.90 to $1.40 on Friday, optionMONSTER's Heat Seeker tracking system shows. This is clearly fresh buying, as previous open interest in the strike was a mere 74 contracts.
These long calls lock in the price where the stock can be purchased through mid-June no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, but the contracts will quickly lose value if shares stall or pull back. The calls will track the stock prices closely because they are in the money . (See our Education section)
VOLC rose 4.33 percent on Friday to close at $18.31. The stock shot to a 52-week high of $24.62 on March 19 but fell to a 52-week low of $16.54 by May 7 and has been grinding higher since.
The June trades made up almost all of Friday's option volume in Volcano, which was more than 90 times its daily average for the last month. Overall calls outnumbered puts by 52 to 1, a reflection of the session's bullish sentiment.
More From optionMONSTER