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Las Vegas Sands Corp. (LVS) Traders Target End-of-the-Week Gains

Bulls are scooping up LVS' weekly 4/26 55-strike call today

by 4/24/2013 11:36 AM
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Option players are loading up on Las Vegas Sands Corp. (NYSE:LVS) calls today. At last check, 9,420 calls had crossed the tape, compared to 3,024 puts. Short-term speculators are betting on some end-of-the-week upside, and are picking up the stock's weekly 4/26 55-strike call. The majority of the 3,095 contracts traded have crossed at the ask price, and implied volatility has surged 13.2 percentage points, hinting at the initiation of new bullish positions.

The out-the-money calls are being purchased for a volume-weighted average price (VWAP) of $0.46. In other words, traders will begin to profit with each step north of $55.46 (strike price plus the VWAP) LVS takes through week's end, which is when these short-term options expire. This breakeven mark is 2% above the equity's current perch at $54.35. Delta for the call is docked at 0.37, or 37%, suggesting a roughly 2-in-5 chance the option will land in the money by Friday's close. Should the stock fail to topple the strike price by expiration, the most today's call buyers stand to lose is the initial premium paid.

Given that Las Vegas Sands has advanced a formidable 18% in 2013, today's trend toward calls only highlights the withstanding trend in the options pits. During the course of the past 20 sessions, traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 39,694 calls, versus 24,149 puts, resulting in a call/put volume ratio of 1.64.

What's more, the equity's Schaeffer's put/call open interest ratio (SOIR) of 0.60 ranks in the 2nd percentile of its annual range, meaning short-term speculators have rarely been more call-heavy toward the stock during the the past year.

This bullish alignment isn't too surprising considering LVS' aforementioned year-to-date gains. From a longer-term perspective, the equity has enjoyed a nearly impenetrable layer of support from its 20-week moving average since mid-September. Las Vegas Sands Corp. (NYSE:LVS) is continuing with this upward momentum in today's session, with the equity up 1% amid reports that lobbyists in Japan will begin pushing for legislation to legalize gambling in the island nation.


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