Stun-gun maker Taser International has been trying to work its way higher, and yesterday traders took a bullish shot on the name.
OptionMonster's scanning programs detected the purchase of 7,000 September 12.50 calls, most of which priced for $0.20. Volume was about 7 times open interest at the strike, indicating that new money was put to work.
Calls lock in the price where investors can buy shares in the company. These options can generate significant leverage in a rally because they are much less expensive than buying stock outright, but the contracts will expire worthless if the shares don't move far enough and fast enough.