Las Vegas Sands Corp. (LVS) Option Traders Bet On a Quick Reversal

Las Vegas Sands Corp. (NYSE:LVS) received a bullish brokerage note today, but put players aren't buying it

by Karee Venema

Published on Jun 4, 2015 at 2:27 PM
Updated on Jun 24, 2020 at 10:16 AM

Las Vegas Sands Corp. (NYSE:LVS) is helping to lead its sector peers higher today, after Standpoint Research started coverage on the stock with a "buy" rating. At last check, the shares were up 4.6% at $54.84, and speculators were flooding the equity's options pits, ahead of the company's annual shareholder meeting that kicks off at 3 p.m. ET.

Specifically, total volume has jumped to three times what's typically seen at this point in the day. By the numbers, 24,000 calls have changed hands, compared to 19,000 puts. Most active is LVS' weekly 7/2 47.50-strike put, where it appears new positions are being purchased. If traders are indeed buying to open puts, the goal is for LVS to tumble below the strike by the close on Thursday, July 2 -- when the options expire.

Widening the scope reveals option traders have shown a slight preference for calls over puts in recent months. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), LVS' 50-day call/put volume ratio of 1.21 ranks in the 66th annual percentile.

In the front-month series, specifically, peak call open interest currently resides at the June 55 strike. Heavy accumulations of call open interest can often translate into a layer of overhead resistance; so, it's interesting to note that LVS topped out at an intraday high of $55.36 earlier.

Taking a longer-term look at the charts shows LVS has been charting a path lower over the past 52 weeks -- down 27%, amid pressure from its descending 120-day moving average. In fact, this trendline -- which is currently located at $55.06 -- helped contain today's rally. What's more, this burst higher could just be a blip on the bulls' radar, given Las Vegas Sands Corp.'s (NYSE:LVS) history of poor June performances.

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