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Options Intelligence Report: Options Traders Storm Las Vegas Sands Corp. As Shares Soar

 April 05, 2010 04:48 PM
 


Las Vegas Sands Corp. (LVS) – Shares of the owner and operator of The Venetian Resort Hotel Casino and other gaming resorts surged 8.92% to attain a new 52-week high of $23.19 today. The rally in share price at Las Vegas Sands Corp. inspired options investors to initiate bullish trading strategies on the stock. Near-term bullish players populated the April contract by purchasing both in and out-of-the-money call options, as well as by selling out-of-the-money put options. Existing open interest levels in call options at the most heavily trafficked strikes in the April contract (April $21/$22.5/$24) cloud the picture a bit because it is more difficult to pinpoint new positioning. However, fresh plain-vanilla call buying in the September contract provides a clear bullish signal on the casino resort operator. Traders anticipating continued upward movement in the price of the underlying stock through September expiration picked up 2,000 calls at the September $26 strike for an average premium of $2.29 apiece. Investors holding the September $26 strike call contracts profit if Las Vegas Sands' shares surge 22% from the current price of $23.19 to exceed the effective breakeven point to the upside at $28.29 by expiration day in six months.

[Related -Pfizer Inc. (PFE) Q3 Earnings Preview: What To Watch?]

Pfizer, Inc. (PFE) – A large-volume plain-vanilla debit call spread employed on Pfizer this afternoon indicates one options player expects shares of the underlying stock to rebound by expiration in June. Pfizer's shares slipped 1.10% lower during the trading session to stand at $16.90. The investor looked to the June $17 strike to purchase 19,500 calls for an average premium of $0.56 per contract, which were spread against the sale of the same number of calls at the higher June $19 strike for $0.08 each. The net cost of the bullish transaction amounts to $0.48 per contract, thus positioning the investor to accrue maximum potential profits of $1.52 per contract should Pfizer's share price rally more than 12.4% from the current price to $19.00 by expiration day in June. Shares of the global pharmaceutical company last traded above $19.00 on February 2, 2010, when the stock reached an intraday high of $19.33.

[Related -Darden Restaurants, Inc. (DRI): Popular Food, Unpopular Stock]

 iShares MSCI Emerging Markets Index ETF (EEM) – Shares of the emerging markets exchange-traded fund, which corresponds to the price and yield performance of the MSCI Emerging Markets Index, increased more than 1% during the current session to reach a new 52-week high of $43.71. One big options player decided to take advantage of cheaper put premiums today by extending a massive protective put position on the fund.


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