Las Vegas Sands turned quick profits for upside option positions today.
Just last Friday, Investitute’s market scanners identified the purchase of 2,600 November $66 calls for $0.45 to $0.81 with shares at $65.54. These were clearly new positions, as open interest in the strike was only 696 contracts before the trades occurred.
Those calls sold for $2.61 today, nearly 6 times their original purchase price. The stock rose just 4.4 percent in the same time frame, illustrating the kind of leverage that can be obtained through options.
Long calls lock in the price where a stock can be purchased, gaining with a rally and providing leverage to the underlying shares. The contracts can quickly lose value if the stock stalls or pulls back but also carry less risk than owning the shares themselves.
LVS was up 1.19 percent today to close at $67.34. Morgan Stanley upgraded the casino operator to “overweight” from “equal weight” and raised its price target to $72 from $65 last night based on projections for 10 percent annual growth in Macau gaming revenue.