Mako Surgical drew upside option activity just before the Labor Day weekend, and one trader got even more bullish on the medical-device company yesterday.
optionMONSTER's Heat Seeker system detected the sale of 2,500 January 15 calls for $2.40 and the purchase of 3,750 January 17.50 calls for $1.30. Volume was below previous open interest in the 15s but above it in the 17.50s, indicating that an investor is rolling a position to a higher strike while increasing the size of the bet.
The trader is closing the lower-strike calls and opening a position at a level $2.50 higher, likely taking some profits off the table in the process. The new long calls lock in a $17.50 purchase price for the stock no matter how far it might rise, but they will expire worthless if shares remain below that level. (See our Education section)
MAKO rose 4.39 percent yesterday to close at $16.18. The company gapped up from the $12.50 level after reporting quarterly results on July 30 and has been trading mostly between $14 and $16 since then. It saw an unusual bullish three-way on Aug. 30 , the last session before the holiday.
Total option volume in the name exceeded 8,300 contracts yesterday, nearly 7 times its daily average for the last month. Only 187 puts changed hands, a reflection of the session's bullish sentiment.
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