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January 10, 2013  Thu 3:16 AM CT

MGM: SEE CHART GET CHAIN FIND STRATEGIES
A large downside position is targeting MGM Resorts, which hit an eight-month high yesterday but then lost ground.

A trader sold 6,000 January 12.50 puts, mostly for $0.15, against previous open interest of more than 26,000 contracts, according to optionMONSTER's Depth Charge system. At the same time, he or she bought the same number of the February 13 puts for the ask price of $0.59 in volume that was well above open interest of just 650 at that strike, indicating a new position.

With just nine days left to expiration, this is very likely a trader rolling the January position to the higher February strike. The move would give strategy another month to work while getting an additional $0.50 of downside exposure. (See our Education section)

MGM fell 0.46 percent yesterday to close at $12.89 but climbed to $13.18 in the morning, its highest price since May 3. Shares of the casino operator were above $14 through the previous two months and down near support at $9 in mid-November.

More than 38,000 MGM options traded on the day, about 3 times its daily average in the last month.
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