AAL

Boyd Gaming Options Bull Strikes After Upgrade

It looks like a long call spread was initiated in the September series

Aug 14, 2018 at 2:07 PM
facebook X logo linkedin


Jefferies chimed in on casino stocks today, saying recent weakness in the sector creates "opportunity for regional and Nevada-driven stocks." While the brokerage firm turned bearish on Wynn Resorts (WYNN), it upgraded Boyd Gaming Corporation (NYSE:BYD) to "buy" from "hold." In reaction, BYD stock is up 2.2% at $35.16, and call options are running hot.

With about two hours left in today's trading session, 10,320 BYD call options have changed hands -- five times what's typically seen, and volume pacing in the 97th annual percentile. By comparison, just 22 puts are on the tape.

The bulk of today's activity is centered at the September 37 and 40 calls, where it looks like a trader initiated a long call spread for an initial cash outlay of $260,000 (5,000 contracts * $0.52 premium paid * 100 shares per contract). The short call lowered the cost of entry of buying a call outright, while also dropping the breakeven mark to $37.52 (bought 37 strike plus net debit).

However, the speculator has also forfeited the unlimited profit potential of a straight long call purchase. The maximum potential gain is capped at $2.48 per spread (difference between the two strikes less the net debit), no matter how far above $40 BYD stock rises by September options expiration.

Looking at the charts, the $39-$40 region has been a formidable foe for Boyd Gaming over the long term. Not only is this region home to the equity's Feb. 1 decade high of $40.44, but it also contained breakout attempts in both June and July. Below here, however, is BYD's 200-day trendline, which has helped usher the shares to a nearly 34% year-over-year return.

byd stock daily chart aug 14

 

Two High-Octane Trade Ideas. One Simple Goal: Intraday Profits.

Dynamite Day Trading Signals delivers two same-day options trades every week — powered by proprietary intraday analysis and 43+ years of trading expertise.

But this isn’t just another stream of alerts.

It’s a structured plan with clear entry and exit points – designed for traders who want to act fast, trade smart, and wrap up gains before the closing bell.

No guesswork. No overnight exposure – Just two well-researched setups per week — whether you prefer buying premium or selling it.

And the results speak for themselves: subscribers have locked in +245.8% total profit over the last six months (since inception!).

👉 Start your one-month trial now for just $10, and be ready for the next trade alert.