Mako at Long Term Support / New Ratio Trade

With MAKO selling off hard -9.75 and at Long Term Support at 14.90 (See Monthly Chart), and with option volatility still high, (near 80)a Ratio call spread looks good here.

 So I'm Long the MAKO Aug 15 calls and short twice as many Aug 20 calls for a net debit of $1.00. Risk / Reward looks like this: At Aug expiration, Profitability is between 16.00 and 24. Max Profit is at 20 ($400 per spread). Risk is $100 per 1x2 15.00 This spread is a loser at expo above 24 and will lose point for point (on the number of NET short calls, in this case 5) with the stock on the upside above there.So if 5 spreads were placed:

 

	Position	Entry	Strike		15	16	17	18	19	20	21
Long	5	1.70	15	Long Opt	0	500	1000	1500	2000	2500	3000
Short	10	0.35	20	Sht Opts	0	0	0	0	0	0	-1000
Net Debit		500		Ratio Trade	-500	0	500	1000	1500	2000	1500
					22	23	24	25	26	27	28
				Long Opt	3500	4000	4500	5000	5500	6000	6500
				Sht Opts	-2000	-3000	-4000	-5000	-6000	-7000	-8000
				Ratio Trade	1000	500	0	-500	-1000	-1500	-2000

*note prices have changed since this trade was 1st attempted, in fact mid point of bid/offer is priced at .90 currently 1.50 vs .30.

Disclaimer

This is trade analysis, not a recommendation.
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