By Mike Yamamoto of OptionMonster

NEW YORK -- Traders were looking for bullish momentum to continue in Teradyne (TER - Get Report) , which has been moving steadily higher since the beginning of the month. 

More than 11,600 October 22 calls were bought for 15 cents to 35 cents in less than 20 minutes Wednesday afternoon, according to OptionMonster's tracking systems. Open interest in the strike was just 695 contracts before the session began, showing that this was fresh buying. 

These long calls lock in the price where the stock can be purchased through mid-October no matter how far it might climb. They could be sold earlier at a profit if premiums rise with a rally before then, providing potentially significant leverage, but the contracts will expire worthless if shares remain below $22. 

Teradyne gained 1.99% on Wednesday to close at $19.95. The chip-testing equipment company was just shy of $20 heading into its earnings report a month ago but fell sharply after issuing those results. The stock found support at the $18 level and has been working its way higher since, though it has not traded above $22 since 2004. 

Wednesday's total option volume in Teradyne was 35 times its daily average for the last month. Overall calls outnumbered puts by 22 to 1, a reflection of the session's bullish sentiment. 

Yamamoto has no positions in TER.


This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.