Kinetic Concepts is up 15 percent since winning a key court ruling earlier this week and is drawing upside options activity today.
Traders are buying calls in the medical technology company at the July 35 strike for $0.15 to $0.25. The trades do not appear to be insitutional in size, however, and may be the work of individual investors acting on a newsletter recommendation.
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What is interesting is that 1,469 Kinetic Concepts calls have traded against zero open interest and zero average volume at the July 35 strike. Total calls at all contracts outnumber puts by 13 to 1, indicating an overall bullish sentiment.
Kinetic Concepts is up more than 4 percent to above $28 in midday trading. The shares have spiked since an Australian court ruled in favor of the Texas company in part of a patent dispute Monday, issuing a temporary injunction that bars UK-based Smith & Newphew from selling wound-dressing kits that are at the center of the case.
It is the second time this month that Kinetic has drawn bullish options activity. The shares would need to rise at least 23 percent in the next month for the July 35 calls to be profitable.
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Mike Yamamoto is an analyst and writer for OptionMonster.