Unusual Options Activity: Las Vegas Sands (LVS)

Casino operator Las Vegas Sands (LVS) is down about 30 percent from its April highs. One trader sees shares recovering from its recent selloff in the months ahead.

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  • That’s based on the December $45 calls. With 70 days until expiration, 28,279 contracts traded compared to a prior open interest of 641, for a 44-fold surge in volume on the trade. The buyer of the calls paid $3.02 to make the bullish bet.

    Shares recently traded just under $45, making this an at-the-money trade. If the stock goes to its old highs, it would return over 40 percent. Despite the recent selloff in the markets, LVS still trades more than $10 off its 52-week lows of $33.38.

    While the casino hasn’t been profitable over the past year, revenues have jumped 143 percent amid strong traffic.

    Action to take: Like many stocks, shares look oversold and ready to move higher in the coming weeks. A move higher from current oversold levels could lead to a double-digit gain for shareholders alone. Las Vegas Sands has a dividend yield of 0.4 percent.

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  • For traders, the December $45 calls are far enough out to get past the current market turmoil. As an at-the-money play coming from oversold conditions, traders can likely nab high-double-digit returns or better well before expiration on a pop higher for LVS shares.


    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.