Options News
$ERI bulls double their money
Eldorado Resorts (ERI) has surged over the last several months, returning huge profits on upside option positions. On Jul. 31 of last year, Market Rebellion’s Unusual Option Activity Service detected the purchase of 5,000 January $55 calls in two prints for $1.55 with shares at $44.91. This was clearly fresh buying, as open interest in the […]
Eldorado Resorts (ERI) has surged over the last several months, returning huge profits on upside option positions.
On Jul. 31 of last year, Market Rebellion’s Unusual Option Activity Service detected the purchase of 5,000 January $55 calls in two prints for $1.55 with shares at $44.91. This was clearly fresh buying, as open interest in the strike was just 865 contracts before that session began.
Those calls traded for $3.71 today, more than 2 times their purchase price. The stock rose 30.33% in the same time frame, a huge move but still nowhere near that of its options.
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.
ERI is higher by 0.67% today last at $58.40. The casino operator has been mentioned positively by both SunTrust and Deutsche Bank in their 2020 outlooks.