Fundalents concerns for LVS has Bears Circling 3/4/2013
Las Vegas Sands Corp . (NYSE:LVS - 51.12) is trading lower today, and skeptical option speculators are taking notice. Around 11,000 put contracts have crossed the tape, representing a 24% uptick to the average intraday volume. One trader scooped up a block of 1,500 September 47 puts near the ask price for $4.10, revealing his opinion that the stock is going to experience some technical hurdles over the next six months.
In order for these out-of-the-money puts to be profitable, LVS must fall roughly 16% from present levels to land below breakeven at $42.90 (strike less net debit) by September expiration. Delta for these puts is currently listed at negative 0.35, meaning for every dollar LVS loses between now and Sept. 20, the options will add $0.35. Meanwhile, for every dollar the stock adds, the puts will lose $0.35.
Delving deeper into LVS' sentiment backdrop shows that option players have been picking up puts with some rapidity in recent weeks. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day put/call volume ratio (which measures buy-to-open activity) of 0.64 ranks higher than 63% of other such readings taken in the past year. In other words, speculators have displayed a healthier-than-usual appetite for puts over calls of late.
After stair-stepping its way higher in the latter half of 2012, LVS has started to lose some steam, with the stock down around 8.5% since Feb. 1. The equity's most recent rally attempt was quickly halted by its 20-day moving average. In fact, this descending trendline formed a bearish cross with the security's 10-day moving average in late February, suggesting some near-term technical troubles may lie ahead for LVS.
LVS' negative price action is continuing in today's session, with the stock down around 0.4%. The casino concern has been making headlines lately, as it finds itself under investigation by the Securities and Exchange Commission and U.S. Depart