Traders Place Bullish Bets on Kinetic

OptionMonster co-founder Pete Najarian provides options picks Monday, Wednesday and Friday in TheStreet.com's Deep in the Money Calls newsletter.

Mike Yamamoto, managing editor of OptionMonster.

Kinetic Concepts(KCI Quote) is up 15% 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 15 cents to 25 cents. The trades do not appear to be institutional in size, however, and may be the work of individual investors acting on a newsletter recommendation.

What is interesting is that 1,469 Kinetic 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 is up 4.2% to $28.60 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 U.K.-based Smith & Nephew(SNN Quote) 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% in the next month for the July 35 calls to be profitable.