Bulls targeting new highs in Align

Mike Yamamoto (mike.yamamoto@optionmonster.com)

Align Technology hit an all-time high yesterday, and traders are looking for even more gains by early 2014.

About 2,500 January 47 calls were purchased yesterday for $3.80 to $4.10, according to optionMONSTER's Heat Seeker tracking system. This is clearly fresh buying, as open interest in the strike was a mere 31 contracts before the trades appeared.

These long calls lock in the price where traders can pick up the stock through mid-January no matter how much it might gain. They could be sold earlier if premiums rise with a rally before then, but the contracts will expire worthless if shares remain below $47. (See our Education section)

ALGN rose 4.15 percent to close at $46.71 after peaking at $46.84 earlier in the session. The medical-device company gapped up from below $40 after reporting quarterly results on July 18 but had been trapped in a tight range until yesterday.

Total option volume in the name topped 4,100 contracts yesterday, nearly 29 times its daily average for the last month. Overall calls outpaced  puts by more than 3 to 1.


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