By David Russell
Las Vegas Sands (LVS) dropped on a bad report last week, but investors are sticking with the trade.
optionMONSTER's Heat Seeker tracking system detected the purchase of 10,000 June 46 calls for $5.27 and the sale 10,000 of June 48 calls for $4.38. Volume was more than triple open interest in both strikes.
Equal-sized blocks traded in the March 46s and the March 48s at the same time, although the activity was the exact opposite: The lower strikes were sold for $2.77, the higher strikes were bought for $1.93 and volume was below open interest in both.
The two transactions apparently result from a bullish call spread getting closed in March and rolled to the June expiration. Exiting the March position resulted in a credit of $0.84 and opening the June trade cost $0.89. That means they only paid about $0.05 to gain an additional three months of long exposure to the casino stock.
LVS is up 0.22 percent to $46.13 in morning trading. It dropped more than 8 percent on Friday after revenue failed to grow as much as analysts had expected. The disappointment came despite big growth of gambling activity in Macau, one of LVS's key markets.
The Heat Seeker also showed a similar trade in the March 45-March 47 call spread, which was rolled into a June 45-June 47 contracts. This time they were received about $0.95 from closing March and paid about $1 to open June, also resulting in a net cost of $0.05.
The transactions have already pushed total option volume in LVS to more than twice its average level for a full session, with calls outnumbering puts by more than 5 to 1.
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