By Pete Najarian, co-founder of OptionMonster.

Front-month Allergan ( AGN) call-buying surged amid gains for drug stocks and another hint that merger-and-acquisition activity is awakening.

Professional traders stepped in to buy some 13,000 of the April 45 and April 50 contracts, dwarfing the number of puts that changed hands by more than 20 to 1. In early trading, implied volatility rose 11% to 55.25.

Just after midday, the Irvine, California-based company had risen $2.44 to $41.98, a 6% gain that took it past its 50-day moving average.

Following Johnson & Johnson's late 2008 buyout of Mentor, the specialty pharmaceutical and medical-device maker now stands nearly alone in the field.

Merger-and-acquisition activity has begun to show signs of life, with Suncor today unveiling plans to acquire Petro-Canada and news last week that IBM is considering Sun Microsystems.

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