Casino Stocks React to Macau Licenses, China Protests

MGM is adding to its more than 22% year-to-date deficit

Fernanda Horner

Digital Content Manager

Nov 28, 2022 at 2:29 PM

Casino stocks are in the spotlight today, after the Macau government issued six new licenses for operators to continue doing business in the region. Las Vegas Sands Corp. (NYSE:LVS), MGM Resorts International (NYSE:MGM), and Wynn Resorts, Limited (NASDAQ:WYNN) are among the benefiters, though reinstated Covid-19 restrictions in China and the protests that followed have these stocks either paring gains or erasing them altogether.

WYNN Leading Gainers

Last seen up 4.7% at $78.43, Wynn Resorts stock is outpacing its competitors. The equity has had support from the 20-day moving average since late October, but is now running into a newly formed ceiling at the $80 level. Year-over-year, WYNN is still down 8.7%.

It's worth noting short sellers are hitting the exits, though. Short interest is down 22.9% in the most recent reporting period, and the 6.90 million shares sold short now make up 7.2% of the stock's available float.

LVS Eyes 4th-Straight Win

Trailing behind is Las Vegas Sands stock, which is up 1.3% to trade at $43.73 at last check. Though shares are running into the resistance at the $45 region, they are still eyeing a fourth-straight daily win. In addition, LVS sports a 16.7% year-to-date lead.

Options traders are chiming in, with 73,000 calls and 39,000 puts exchanged so far, or double the volume that is normally seen at this point. The most popular contract is the weekly 12/2 45.50-strike call, where new positions are currently being bought to open.

MGM Pivots Lower

MGM Resorts International stock is moving in the opposite direction. The equity is off 2.2% at $34.96, despite a price-target hike from BofA Global Research to $37 from $36. The shares' most recent rally failed to conquer the $39 region, and so far in 2022 MGM has shed 22.3%.

Long puts have been more popular than usual in the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the security's 50-day put/call volume ratio of 1.60 ranks in the 89th percentile of its annual range.

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