As MGM Resorts bounced on Friday, one trader was positioning for lower volatility in the casino operator's stock.
A trader sold 10,000 June 9 puts for the bid of $0.89 against previous open interest of just 69 contracts, so it was a new position. The activity pushed total option volume in the name to 16,339, well above its daily average of 9,700 in the last month.
Just 40 seconds after the puts were sold, the largest block of MGM stock traded as 320,000 shares were sold for $9.9231. The combination of stock and options created an overall delta-neutral position, which would suggest that the trader is looking for MGM to show lower volatility in the coming months. (See our Education section)
MGM was up 2.35 percent to end the week at $10.01, a day after seeing its lowest close in more than a month. Shares had tested resistance at $11.50 in mid-October.
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