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Option Brief: Although Las Vegas Sands Corp. (NYSE:LVS) tagged a fresh five-year high on Wednesday, put volume accelerated to more than two times the average daily volume. The stock's weekly 12/6 76-strike put saw the largest increase in open interest of all contracts exchanged yesterday. With 92% of the 1,374 contracts traded crossing on the ask side, it appears that new bearish positions were initiated.
With LVS lingering near $75.26, these puts are currently in the money. However, in order for traders to turn a profit, the shares need to slide below breakeven at $74.50 (strike minus the volume-weighted average price of $1.50) before this Friday's close.
On the charts, Las Vegas Sands has had a tremendous year, with the shares up 63%. In fact, the stock hit another new multi-year peak of $75.56 this morning. Against this backdrop, a portion of Wednesday's put buying could represent shareholders expecting LVS to pull back from its recent string of technical milestones.
As it turns out, the equity is trading north of its upper Bollinger Band, and its Relative Strength Index (RSI) is docked at 70. These are two indications that Las Vegas Sands Corp. (NYSE:LVS) is swimming in overbought waters, and could be poised for a consolidation in the near term. In today's session, though, the equity is continuing its upward trajectory, and was last seen 1.2% higher.