Call spread targets highs in Mako
Chris McKhann | firstname.lastname@example.org
optionMONSTER systems show that 8,695 MAKO options changed hands yesterday, more than 10 times its daily average over the last month. Almost all of that was in a January 2015 call spread.
A trader bought 4,000 of the 17.50 calls for $1.65 and sold 4,000 of the 30 calls for $0.35. Volume was above the previous open interest at each strike, so this is new positioning.
The trader spends $1.30 on this vertical spread to get the exposure up to $30. The maximum gain if shares are at or above that level is $11.20. The delta of the higher-strike calls suggests a 13 percent probability that MAKO will be above that price at expiration. (See our Education section)
The stock rose 1.98 percent yesterday to close at $11.84. That is around the middle of its recent trading range, as shares have been trending up from a low of $10 in April. Shares were above $30 last May.