Unusual Options Activity: Las Vegas Sands (LVS)

Casino operator Las Vegas Sands (LVS) has had a great year, with shares up over 80 percent. One trader is betting the good times will continue to roll.

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  • That’s based on the September $45 calls. With 114 days until expiration, 76,065 contracts traded compared to a prior open interest of 363, for a staggering 210-fold rise in volume on the trade. The buyer of the calls paid $16.15.

    Shares recently traded for just under $60, meaning the options are about $15 in-the-money, and carry very little premium for how much time the trade has to play out. The stock has come off of a 52-week high of $65.58 in the past month.

    While revenues have grown thanks to stronger travel demand, the casino has still lost money over the past year. And fears of a slowing economy, while not yet showing up in travel and tourism, could hit the casino industry in time if they play out.

    Action to take: Investors interested in shares should wait for the current pullback to end, likely in the mid- or low-$50 range. Las Vegas Sands cut its dividend in early 2020, and hasn’t yet reinstated it, so investors won’t get paid to wait.

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  • For traders, the September $45 calls look attractive given their low premium. They’re deep in-the-money, so returns may not be huge, but they can still deliver low-to-mid double-digit gains in the months ahead.


    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.