Opko Health (OPK) is a biotech name that could make a significant backtest to multi-year lows. Shares are north of $8, but they could tumble to $5 during the next six to eight weeks.

Opko Health tested a 52-week low of $7.12 last week. If shares fail to hold $7, there is serious risk to $5 and prior multi-year resistance. Here’s how I’m playing it:

Buy to open the OPK March 7 puts (OPK160318P00007000) at current levels, which are about $0.35.

I like these put options at current levels, and you can use a Limit Order up to $0.45 to get the best fill.

The breakeven point for the trade is  if Opko Health shares fall to $6.65 by mid-March. A money doubler would occur if shares trade below $6.30. If the stock does fold like a cheap lawn chair to $5, these options would be $2 “in the money.”

Shares of Opko Health are volatile, and there is also risk to $9-$10 on any positive drug-development news. The technical pattern shows lower highs and lower lows, however, and the major moving averages are rolling over.

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