Casino Stocks Shrug Off Disappointing Data Out of Macau

MGM Resorts International (NYSE:MGM), Las Vegas Sands Corp. (NYSE:LVS), and Wynn Resorts, Limited (NASDAQ:WYNN) are moving higher, despite another poor month for Macau casinos

by Josh Selway

Published on Dec 1, 2015 at 11:29 AM
Updated on Jun 24, 2020 at 10:16 AM

It's been a horrid year for casino locale Macau, with gaming revenues steadily falling for several months. It was no different in November, as casino revenue for the month dropped by nearly one-third. However, several casino stocks are actually moving higher following the news. Specifically, MGM Resorts International (NYSE:MGM)Las Vegas Sands Corp. (NYSE:LVS), and Wynn Resorts, Limited (NASDAQ:WYNN) are all in the black at midday. Below, we'll take a closer look at these three gambling names. 

MGM was last seen 1.5% higher at $23.07, bringing its 2015 lead to almost 8%. What's more, the shares are set to close above both their 10- and 20-day moving averages for the first time in two weeks. Option traders are likely pleased with this display of technical strength. 

At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), MGM Resorts International boasts a 50-day call/put volume ratio of 4.14, which outranks 72% of all readings from the past year. In other words, call buying has been more popular than normal in recent weeks, compared to put buying. This could have something to do with the company's strong quarterly showing and real estate investment trust (REIT) plans, revealed in late October, which ultimately ushered MGM to an annual high of $24.41, tagged Nov. 4. 

In the meantime, LVS has already been on both sides of breakeven today, but was last seen 0.7% higher at $44.37. Still, the stock continues to trade below its 10-day moving average, which has been pressuring the shares lower over the past month. 

Option traders, though, have to be hoping Las Vegas Sands Corp. can climb out of its year-to-date hole, which currently stands at 23.8%. Over the past 10 sessions at the ISE, CBOE, and PHLX, the equity has amassed a call/put volume ratio of 5.13 -- an annual bullish high. Should LVS continue to flail, a mass exodus of option bulls could exacerbate selling pressure.

Lastly, WYNN has surged 6.7% to $66.95, suggesting perhaps the Macau data was already priced in. This is an unusual show of strength from the shares, which have given up 55% in 2015. In fact, the security has trailed the S&P 500 Index (SPX) by more than 20 percentage points over the past three months. 

However, unlike its sector peers, the options backdrop on Wynn Resorts, Limited has been unusually put-skewed recently. The stock's 10-day put/call volume ratio of 0.98 registers in the 92nd percentile of its annual range. Today, in fact, WYNN put volume is running at three times the average intraday clip, with weekly puts expiring in the next two weeks accounting for four of the five most active options.

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