Options Intelligence Report: Las Vegas Sands Corp. (LVS), Pfizer, Inc. (PFE) & iShares MSCI Emerging Markets Index ETF (EEM)
Options Traders Storm Las Vegas Sands Corp. As Shares Soar
LVS ñ Las Vegas Sands Corp.
Shares of the owner and operator of The Venetian Resort Hotel Casino and other gaming resorts surged 8.92% to attain a new 52-week high of $23.19 today. The rally in share price at Las Vegas Sands Corp. inspired options investors to initiate bullish trading strategies on the stock. Near-term bullish players populated the April contract by purchasing both in and out-of-the-money call options, as well as by selling out-of-the-money put options. Existing open interest levels in call options at the most heavily trafficked strikes in the April contract (April $21/$22.5/$24) cloud the picture a bit because it is more difficult to pinpoint new positioning.
However, fresh plain-vanilla call buying in the September contract provides a clear bullish signal on the casino resort operator. Traders anticipating continued upward movement in the price of the underlying stock through September expiration picked up 2,000 calls at the September $26 strike for an average premium of $2.29 apiece. Investors holding the September $26 strike call contracts profit if Las Vegas Sandsí shares surge 22% from the current price of $23.19 to exceed the effective breakeven point to the upside at $28.29 by expiration day in six months.
PFE ñ Pfizer, Inc.
A large-volume plain-vanilla debit call spread employed on Pfizer this afternoon indicates one options player expects shares of the underlying stock to rebound by expiration in June. Pfizerís shares slipped 1.10% lower during the trading session to stand at $16.90. The investor looked to the June $17 strike to purchase 19,500 calls for an average premium of $0.56 per contract, which were spread against the sale of the same number of calls at the higher June $19 strike for $0.08 each.
The net cost of the bullish transaction amounts to $0.48 per contract, thus positioning the investor to accrue maximum potential profits of $1.52 per contract should Pfizerís share price rally more than 12.4% from the current price to $19.00 by expiration day in June. Shares of the global pharmaceutical company last traded above $19.00 on February 2, 2010, when the stock reached an intraday high of $19.33.
EEM ñ iShares MSCI Emerging Markets Index ETF
Shares of the emerging markets exchange-traded fund, which corresponds to the price and yield performance of the MSCI Emerging Markets Index, increased more than 1% during the current session to reach a new 52-week high of $43.71. One big options player decided to take advantage of cheaper put premiums today by extending a massive protective put position on the fund.
It looks like the trader shed 90,000 put options at the April $40 strike for a premium of $0.08 per contract in order to roll the protective stance to the May $40 strike where 90,000 puts were purchased for an average premium of $0.43 each. It is unclear how much the trader initially paid to buy the April contract puts, however the net cost of todayís transaction (in isolation) amounts to $0.35 per contract. Thus, the investor has extended downside protection through to May expiration in case the fundís shares slump during the current month or during the first few weeks of May.
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