Related Symbols:LVSLas Vegas Sands Corp. (LVS) shares closed up 11 cents to $15.21 on Friday, but at least one investor expressed moderate bullishness by purchasing a later-dated call spread and selling out-of-the-money puts.
Firstly, look at the June 15-20 call spread. The June 15 calls, which gained two cents on the day Friday, and the June 20 calls, unchanged before the weekend, changed hands 5,000 times each, as an investor bought the in-the-money June 15 calls and sold the out-of-the-money June 20 calls for a premium of $1.87. On Friday, open interest of the June 15 calls was 912 contracts, while the June 20 calls were home to 2,600 contracts of open interest, indicating the investor traded this spread to open.
Secondly, the investor sold 5,000 June 12 puts (closed down roughly five cents on the day) possibly to help fund his call spread purchase. The June 12 puts were home to open interest of 889 contracts, and are currently trading at a price around $1.53.
Because the investor bought a call spread, which makes money if the stock rallies, and sold a put, which also makes money if the stock rallies, the investor hopes for a rally in the shares. Because they paid a net of 34 cents for the package, the investor needs the stock to be higher than $15.34 at June expiration to make money. If the stock rallies, investors could choose to exit the spread before then. It looks like the investor is taking on a moderately bullish position and expecting the stock to head higher throughout the next six months.
www.onn.tv/articles/volatility-overlays/...egas-sands-lvs-283/
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