Trader sees end to Mako Surgical drop
Chris McKhann | firstname.lastname@example.org
MAKO has plummeted 39.5 percent to $14.89 today after the company reported that it expects to sell fewer of its robotic-arm orthopedic systems this year. The stock, which had climbed above $45 in late March, is now trading at its lowest level since early 2011.
More than 19,000 MAKO options have already changed hands this morning, compared with a daily average of fewer than 3,000. More than 6,000 August 12.50 puts have traded against open interest of just 75 contracts, according to optionMONSTER's systems. Almost all of the puts appear to have been sold at the bid price, with the biggest print of 2,400 going for $0.70.
The put selling is a bet that MAKO will hold above that $12.50 strike price through expiration in mid-August. The trader is trying to take advantage of the increased volatility that accompanies a steep selloff while setting a price at which they would be willing to buy the stock. (See our Education section)