Las Vegas Sands Options Volume Raises Attention

Las Vegas Sands Corp. (LVS) rarely appears on an equity options scan, but Monday it did because there were about 14,492 contracts traded, more than three times the daily average of 4,232. Particularly of note was that greater than half the volume, or 8,411 contracts, was comprised in the June calls with a $60 strike price which are now priced at about $1.20 a piece.

The options are a risky bet given that there are only four days left until expiration and for traders to exhibit such interest bodes well for a near term continuation of a bounce even on top of today’s 6.6% jump on 1.7 times average volume in the underlying.

Technically oversold, the stock has lost about a fourth of its value just this month and is fresh off a new 52-week low of $53.63 thanks to a series of bearish news items; Macao market share concerns, a dip in Nevada gambling revenue and a string of disconcerting analyst notes - especially the psychological hit that being removed from Goldman’s Americas Conviction Buy List had just two weeks after the gaming company’s inclusion.

But despite worsening fundamentals, at such depressed levels and with 25% of the publicly traded float short, there’s bound to be a multi day short covering rally similar to that of the January, March and April reprieves from this vicious downward cycle.

Comments

[David Brown]

LVSRP.X 20.10-20.60 5,350 traded 21.30

WHAT IS GOING ON HERE?! 5k DEEP CONTRACTS

[User 155569]

Wow, good analysis. Did you actually go long LVS? If anyone listened to you, I hope they learned their lesson.