Varian Medical Systems gapped higher on Friday, and now the bulls are hunting for more upside.
optionMONSTER's data-mining systems detected the purchase of about 3,200 November 70 calls, most of which priced for $0.70 to $0.87. Volume was 6 times the open interest in the beginning of the day, indicating that new money was being put to work.
The calls locked in a price of $70 to buy stock in the company, which makes radiation equipment used to treat cancer and build X-ray machines. Those options will generate nice leverage if the stock continues to rally through that level. If it doesn't, however, the calls will expire worthless. (See our Education section)
VAR rose 3.01 percent to $68.77 yesterday and is up 20 percent in the last week. Most of that move came on Friday after earnings of $1.08 per share beat the $1.03 consensus estimate. Revenue guidance was also significantly better than expected as the company gains customers overseas.
Total option volume was 7 times greater than average in the name, with calls accounting for more than three-quarters of all contracts.
(A version of this post appeared on InsideOptions Pro yesterday.)
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