Mako Surgical has been rallying hard, and now one investor wants
optionMONSTER's Depth Charge tracking system detected the purchase
of 2,000 August 17.50 puts for $2.35 and the sale of 4,400 August
15 puts for $1.10. Volume was more than 5 times open interest in
The trade was a variation of a ratio spread and is designed to
leverage a small drop in the maker of orthopedic devices. It cost
just $14,000 to implement and will earn a maximum profit of
$500,000 if MAKO closes at $15 on expiration.
At lower prices, the investor will be forced to buy shares for $15
because of their larger short position in the puts. The transaction
was probably the work of a long-term shareholder who wants to hedge
against a pullback in the near term but is willing to own more
stock at a lower price in the future.
MAKO is up 2.11 percent to $17.88 in afternoon trading after
hitting a new all-time high of $18.12 early in the session. It's up
79 percent in the last six months, squeezed higher against heavy
short interest and galloping revenue growth. On Jan. 10, for
instance, management said the number of operations using its
surgical devices doubled in the fourth quarter versus the same
period in 2009.
Overall option volume in MAKO is 10 times greater than average
today, with puts outnumbering calls by 48 to 1.
(Chart courtesy of tradeMONSTER)
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