Shares of Ziopharm Oncology gapped higher this week, and option traders are betting on even larger gains ahead.
OptionMonster's tracking systems showed heavy buying in the May 7 calls, including one big block of 3,500 contracts for $0.70. Open interest was a mere 145 contracts coming in today, so someone obviously believes that this $245,000 investment will yield big returns.
Calls lock in the price investors must pay to buy a stock. They can generate nice leverage in the event of a rally, but will expire worthless if the shares don't rise above the $7 strike price by mid-May.