The past few weeks have been a roller coaster ride for owners of Macau gambling stocks. After a relatively smooth ride higher through much of January, the stocks suddenly started to get more volatile–even for the already volatile sector. The reason: Macau’s revenue numbers.
First, the data from the Chinese New Year looked good, sending the stocks soaring higher. The next week, the numbers plunged–and the stocks tumbled. This week, the numbers surged once again, and so did the stocks.
That kind of volatility is great for day traders–but painful for long term investors. And options traders aren’t treating the stocks equally.
For instance, Las Vegas Sands (LVS) appears to be a riskier bet now than it was at the beginning of the month, as implied volatility–the size of the price swings options traders are pricing into their puts and calls–has jumped to 37.96% from 33.14% at the end of January, a 15% increase. Melco Crown Entertainment (MPEL), meanwhile, has seen its implied volatility jump 18% so far this month.
But the options market now views MGM Resorts International (MGM) and Wynn Resorts (WYNN) as slightly less risky bets. Implied volatility at Wynn has dropped from 30.59% on Jan.31 to 28.37%, a 0.7% drop. MGM, meanwhile, has dropped 1%.
The upshot: Whatever is happening in Macau–and I’m not sure anyone really knows right now–is having a bigger perceived impact on Las Vegas Sands and Melco Crown than it is on Wynn and MGM.
Keep that in mind next week when gaming revenue is released again.
Las Vegas Sands has gained 1.05% so far today, to $50.86, while Wynn Resorts has jumped 0.9% to $116.55. MGM Resorts has climbed 2.2% to $12.38, and Melco Crown has gained 0.75% to $18.78.
Well the options market is telling you their is not a lot of risk to the downside but that being said this stock is so manipulated I don't know how far up we can go..... They just don't want to let MGM run and it's been that way for a very long time. We don't seem to be getting the big volume in to send this to a better level.
Some are in this for a Vegas Recovery
Some are in this for a China Play
Some are in this for a realestate play
Some are in this for a Online Gaming Play
The strange thing is for the first time in at least 5 years they have all of them going for them and the stock still doesn't want to move up.
Thats because all of those things have been priced in.. they had to be already, why else would would a massively-indebted, money losing company's stock be trading so high? Its all priced in. Now they need to show you they can turn a profit. Good luck.