Bulls Want a Lift From Allergan

Bulls Want a Lift From Allergan
JB Reed | Bloomberg | Getty Images

Option traders are finding a new favorite in Botox maker Allergan.

OptionMonster's tracking systems detected the purchase of 2, 530 April 95 calls for $4.62 and $4.673. Volume was more than 34 times previous open interest at the strike.

Calls lock in the price investors must pay to buy shares, so they can result in some big profits in the event of a rally. That leverage has already been at work in the name because last week investors bought the October 92.50 calls for $0.90 and $0.95. At the time, Allergan was trading for $92.80.

The stock then inched higher and closed yesterday up 1.39 percent to $93.54. That was a gain of less than 1 percent from last week's levels. Those October calls, however, inflated by more than 40 percent to $1.30 from the same move.

Allergan shares has been trending higher for years, but typically sees fewer than 1, 000 options trade per session. The recent activity suggests that it's now being discovered by a new group of investors hoping to leverage its bullish momentum. The company's next earnings report is scheduled for Oct. 30.

Calls outnumbered puts by more than 8 to 1 yesterday.

—By CNBC Contributor David Russell

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David Russell is a reporter and writer for OptionMonster. Russell has no positions in AGN.