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Bulls swarming around Accuray

David Russell (david.russell@optionmonster.com)

Accuray is surging on a strong quarterly report, and bullish trades are appearing left and right in the name.

optionMONSTER's Heat Seeker monitoring program shows more than 29,000 contracts trading in the maker of surgical devices, compared with fewer than 3,000 in a typical session. Calls were bought and puts were sold , which reflects a belief the stock will continue to rally. (See our Education section)

In the largest transaction, 6,879 June 10 calls were unloaded for $1.86 as an equal number of September 12.50 calls were purchased for $1.61. Volume was below previous open interest in the June contracts, which indicates that an existing long position was closed and rolled forward in time. Making the adjustment let the investor collect a credit of $0.25 and provided an additional three months of exposure to potential gains.

ARAY is up 11.15 percent to $10.27 in midday trading after its quarterly loss came in at just $0.07, compared to the $0.20 loss expected by analysts. Management also raised guidance after orders doubled. The stock was already up 65 percent in the last year.

Another trader sold 1,955 June 10 puts for $1.63 and bought an equal number of June 12.50 calls for $1.18. He or she collected a credit of $0.45 and has a position that will behave similarly to owning shares.

About 1,400 contracts were sold in the June 10 puts in separate transaction as investors bet that downside will be limited.

There was also heavy selling in the February 10 puts, with traders driving premiums down from $0.50 to $0.35. More than 3,000 contracts traded in those, dwarfing previous open interest of just 26.

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