$LVS comes up aces for bulls

Option traders have been turning profits on bullish positions in Las Vegas Sands for weeks, and today was no exception.

On Nov. 13, Investitute’s tracking systems detected the purchase of 8,500 January $52.50 calls for $2.75 to $3 with shares at $52.18. This was clearly fresh buying, as open interest int he strike was only 427 contracts before that session began. Investitute co-founder Jon Najarian cited the unusual activity at that time on CNBC’s “Halftime Report.”

Those calls traded up to $5.68 early today, at least twice their initial purchase price. The stock rose 10.2% in the same time frame, underscoring how options can far outperform their underlying shares.

Also on Nov. 13, 5,500 Weekly $55 calls expiring this Friday were purchased for $1.11 to $1.20 above open interest of 773 contracts as part of a bullish spread with shares at $52.46. Those calls traded for as much as $2.87 today, more than double their purchase prices, as the stock climbed 9.89%.

Today’s trades followed two other winning positions in Las Vegas Sands posted on Investitute Nov. 21 and Nov. 26.

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 reached $57.95 this morning but then declined with the broader market to close at $55.57, down 4.75% on the session. The casino operator had rallied in recent weeks after Bernstein initiated coverage of the name with an “outperform” rating and a $65 price target on Nov. 15.