Drug maker Dendreon Corporation (NASDAQ:DNDN - 6.91) extended its recent climb last week, ending north of its 50-week moving average for the first time since July 2011. What's more, the options crowd is anticipating even more upside for the shares this week, as evidenced by Friday's healthier-than-usual appetite for call options.

By the time the dust settled, DNDN had seen roughly 27,000 calls cross the tape -- about three times the norm. For comparison, fewer than 5,300 DNDN puts were exchanged. Digging deeper, speculators established new positions at the out-of-the-money February 7.50 and 8 strikes, which each saw call open interest increase over the weekend. Plus, the majority of the calls traded at the ask price, hinting at newly bought bullish bets.

By purchasing the February 7.50 calls for a volume-weighted average price (VWAP) of $0.22, the buyers will profit if DNDN topples the $7.72 level (strike plus VWAP) by the end of the week. Meanwhile, the more ambitious 8-strike call buyers paid a VWAP of $0.14, indicating a breakeven of $8.14 -- in territory not charted since May 2012. However, even if DNDN takes a breather, the most the traders can lose is the initial premium paid for the calls.

That's not to say that DNDN's front-month options are cheap, though. In fact, the stock's Schaeffer's Volatility Index (SVI) recently shot up to 97% -- above 49% of all other readings of the past year. Or, in simpler terms, DNDN's February-dated options are relatively pricey right now, thanks to escalating demand.

Expanding our sentiment scope, we find that Friday's affinity for long calls merely echoes the growing trend seen on the major options exchanges. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculators have bought to open almost 11 calls for every put during the past two weeks. What's more, the stock's 10-day call/put volume ratio of 10.82 ranks in the 77th percentile of its annual range, suggesting option traders are initiating bullish bets over bearish at a faster-than-usual clip.

However, there could be an ulterior motive behind the accelerated call buying of late. Short interest edged 5.9% higher during the most recent reporting period, and now accounts for a whopping 32.6% of DNDN's total available float. Against this backdrop, short sellers could be buying out-of-the-money calls to hedge their bearish bets.

Ahead of the bell, DNDN is pointed 1% higher. So far this year, the stock has advanced nearly 31%, and has outperformed the broader S&P 500 Index (SPX) by 49 percentage points during the past three months.