Unusual Options Activity: Las Vegas Sands (LVS)

Casinos have been a hot gamble with investors over the past year. Pandemic-driven shutdowns led to a collapse in business. But speculation on reopening has been good for the space. One trader sees room for a further rally in Las Vegas Sands (LVS).

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  • That’s based on the August $60 calls. Expiring in 95 days, and with shares near $56, the trade would move in-the-money if shares rallied less than 10 percent higher from here.

    Over 22,700 contracts traded against an open interest of 145, for a 157-fold explosion in volume. The buyer of the contracts paid about $3.10.

    Shares have also traded over $66 in the past year, before declining over the last two months. With shares now getting down to their 200-day moving average and looking oversold on a technical basis, it’s clear why a trader is expecting a bounce from here.

    Action to take: Casino revenues are likely to trend higher in the coming months as travel for leisure returns. That makes the option an attractive one. Any bounce in the next few weeks could also be good for a jump in the August calls as well.

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  • Traders should look for mid-to-high double-digit gains as a sign to take profits. While shares are likely to bounce, they would have to head back to their old highs for the option to deliver a double at expiration.

     

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