LVS – Las Vegas Sands Corp. – The owner and operator of gambling resorts around the world enticed early-bird bullish investors to the options field today after analysts at Morgan Stanley upgraded LVS to ‘overweight’ and upped their target share price on the stock to $29.00. Las Vegas Sands’ shares rallied during Wednesday’s session on news its Singapore resort is set to surpass analysts’ cash-flow projections this year. Shares of the underlying stock continued higher this morning, rallying more than 3.50% to $25.10 as of 11:05 am (ET), to stand $1.47 below LVS’s current 52-week high of $26.57 attained back on April 26, 2010. Investors hoping to see shares blow through the current 52-week high by June expiration purchased out-of-the-money call options. Traders picked up roughly 2,700 calls at the June $26 strike for an average premium of $0.59 apiece. Call-buyers at this strike price make money if, by expiration, shares of the casino company exceed $26.59. Optimism spread to the higher June $27 strike where investors coveted some 6,500 call options at an average premium of $0.34 per contract. Las Vegas Sands’ shares must rally at least 8.9% from the current price of $25.10 in order for June $27 strike call buyers to start to accrue profits above the average breakeven price of $27.34.
Affiliation: Interactive Brokers
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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