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By David Russell

BioMimetic Therapeutics (NASDAQ:BMTI) has fallen back to a potential support level, and one investor is buying and selling options in hope of a rebound.

optionMONSTER's Heat Seeker tracking system detected a surge of activity in the June 11 calls and the June 15 calls, which traded for $3 and $1, respectively. The lower-strike contracts were bought and the higher ones were sold, resulting in an overall cost of $2. About 2,000 traded in each.

BMTIThe investor will earn twice that amount if the biotechnology stock closes at or above $15 on expiration. The position will lose money anywhere below $13.

BMTI fell 1.10 percent to $11.72 yesterday and has shed 16 percent of its value in the last month. Most of that drop occurred after March 10, when management forecast a wider-than-expected loss for fiscal 2011.

The shares have now almost returned to their 200-day moving average (purple line on chart at right), roughly the same price where they peaked in November. Some chart watchers may expect support around this level.

Yesterday's bullish trade, a vertical spread, pushed total options volume in BMTI to 18 times greater than average. Calls accounted for 90 percent of the activity. (See our Education section)

Source: BioMimetic: What the Bulls Are Seeing