Las Vegas Sands Option Trader Bets That Stock Will Surge 28% in Six Months
Las Vegas Sands Corp. options were among the most-traded on U.S. exchanges after a single wager that the casino operator whose shares have more than doubled this year will rally 28 percent in six months.
March $40 calls were the stock’s most-active options after 10,000 of the contracts changed hands at 12:14 p.m. New York time, equivalent to more than a quarter of the average full-day call volume over the past four weeks. The shares headed for their highest close since October 2008, rising 1.2 percent to $31.36 as of 2 p.m.
“These investors may have an expectation of a sharp increase in the stock between now and March expiration,” strategists at Susquehanna International Group LLP in Bala Cynwyd, Pennsylvania, wrote in a note to clients.
Billionaire founder and Chief Executive Officer Sheldon Adelson is betting on continuing growth in Asia to offset record spending slumps in Las Vegas. He opened the first phase of the $5.5 billion Marina Bay Sands casino resort in Singapore in April, and restarted Las Vegas Sands’ mothballed expansion in Macau, the world’s biggest casino center, where total gambling revenue surged 63 percent in the first eight months of this year.
Implied volatility, the key gauge of option prices, for at- the-money options expiring in 30 days increased to 49.47 after falling to a six-month low of 45.80 last week.
Call volume was almost 39,000 contracts, compared with volume of about 21,500 puts to sell the stock. Calls give the right to buy a security for a certain amount, the strike price, by a set date. Puts convey the right to sell.
Investors use options to guard against fluctuations in the price of securities they own, speculate on share-price moves or bet that volatility, or stock swings, will rise or fall.
To contact the reporters on this story: Jeff Kearns in New York at jkearns3@bloomberg.net; Beth Jinks in New York at bjinks1@bloomberg.net
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