Call buyers hit the jackpot in $LVS

Bullish option traders posted huge gains in Las Vegas Sands today.

On Jan. 11, Investitute’s market scanners identified the purchase of 11,600 February $72.50 calls $1.11 to $1.25 with shares at $70.37. These were clearly new positions, as open interest in the strike was only 1,520 contracts before the trades occurred.

Those calls traded for $7.70 this afternoon, 7 times their original purchase price. The stock rose 13.4% in the same time frame, showing how options can far outpace gains in their underlying shares.

Long calls lock in the price where investors can buy a stock, letting them position for a rally at limited cost with the potential for significant leverage. They carry less risk than owning shares because the most that can be lost is the price of the options no matter how far the stock might fall.

LVS jumped 4.68% to $79.03 today. The company rallied along with other casino operators that were viewed as potential beneficiaries of business lost by Wynn Resorts, whose namesake owner faces allegations of sexual harassment.