LVS – Las Vegas Sands Corp. – Shares of the owner and operator of casino resorts increased as much as 6.40% this afternoon to secure an intraday high of $26.90 following the firm’s better-than-expected second-quarter earnings report released ahead of the opening bell this morning. The casino company posted profits of $0.17 a share, excluding some items, which blew straight past analysts’ consensus estimate of $0.09 a share. Options investors responded to the positive report by initiating various near-term bullish trading strategies on the stock. Optimistic individuals expecting shares to continue to rally ahead of August expiration purchased 1,800 in-the-money calls at the August $26 strike for an average premium of $1.36 apiece. In-the-money call buyers make money as long as Las Vegas Sands’ shares increase 1.70% over today’s high of $26.90 to surpass the average breakeven point at $27.36 by expiration. Investors hoping to see LVS’s shares reach a new 52-week high in the next few weeks scooped up approximately 3,700 calls at the higher August $27 strike for an average premium of $1.03 a-pop. Investors long the August $27 strike calls start to accumulate profits should shares of the underlying stock surge 4.20%, break through the current 52-week high of $27.84, and trade above the average breakeven price of $28.03 ahead of next month’s expiration day. The sale of 1,000 puts at the August $27 strike for an average premium of $1.63 each is also a bullish signal. Perhaps put sellers are ditching previously established bearish positions. Otherwise, traders may be selling the puts outright because they expect shares to trade above $27.00 by August expiration. The sale of the contracts indicates some investors are willing to have shares of the underlying stock put to them at an effective price of $25.37 each should the puts land in-the-money at expiration. The overall reading of options implied volatility on Las Vegas Sands Corp. declined 12.3% to 49.63% following earnings.
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Andrew Wilkinson is the senior market analyst at Interactive Brokers Group, where he provides daily commentary and analysis on U.S. equity options trading throughout the trading day. Andrew provides webinars designed to explain option-related trading scenarios covering futures, fixed income, forex and equities.
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