Learn the trade here. Make it on tradeMONSTER

Options Trading News

December 10, 2012  Mon 12:20 PM CT

LVS: SEE CHART GET CHAIN FIND STRATEGIES
Las Vegas Sands has been marking time, but one investor apparently thinks that it's getting ready to sprint higher.

optionMONSTER's Heat Seeker monitoring system detected the sale of 2,750 December 42.25 calls for $2 and the purchase of an equal number of June 55 calls for $0.96. Volume was below open interest in the December options but not the June calls, which indicates that an existing position was rolled from one contract to the other.

LVS rose 0.71 percent to $43.96 in afternoon trading, leaving those December 42.25 calls in the money. If the investor hadn't adjusted the position, he or she would automatically be required to buy shares in the casino operator at the end next week.

By rolling the position forward, the trader avoids that potential expense and gains an additional six months of upside exposure to the stock, albeit at a much higher price. He or she also collected $1.04 of income in the process.

The trader apparently believes that LVS could rally in the first half of 2013 but is also not willing to pay full price for the stock. The investor is essentially remaining long the name but with much less capital at risk. (See our Education section for more on how trading options can be safer than owning shares.)

The stock has been and been moving sideways since September but is now near the bottom of that range.

The Heat Seeker shows calls outnumbering puts by LVS by almost 2 to 1 so far today, which reflects the bullish tone in name.
Share this article with your friends


Related Stories

LVS

What's behind calls in Live Nation

October 6, 2014

The live-entertainment company has encountered resistance at current levels since reaching a 52-week high in early July.

Premium Services

Free Webinars

Make Money in a Volatile Market

Education & Strategy

Vexed by the VIX

Many people probably don't know that the calculation changed for the CBOE Volatility Index this week, but it's worth discussing...

View more education articles »
optionMONSTER stockMONSTER tradeMONSTER