The Trade
A trader sold 2,000 July $45 calls at $6.40 and bought 2,000 July $60 calls $1.32 for a credit of $5.08 or $1,016,000.
Risk/Reward
As you can see from the graph above, the spread profits from a decrease in the underlying stock at expiration. The bear call spread has limited risk and limited profit potential at expiration. The max risk is $1,984,000, which would occur at an underlying price of $60 or more at expiration. The max profit potential is the credit, which would occur at an underlying price of $45 or less at expiration. The break even underlying price at expiration is $50.08.
The line shown is the upper break even price at expiration. The 52-week range for SNKD is a low of $31.82 and a high of $53.60. SNDK traded 39,388 contracts today compared to average volume of 27,749.
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