Melco Crown Entertainment is hovering near all-time highs, and traders are looking for even more gains in the Hong Kong casino operator.
optionMONSTER's Heat Seeker system shows that more than 10,700 April 22 calls traded in a heavy buying pattern on Friday, led by a single print of 9,277 that went for $0.45. This was clearly a new position, as it was well above the strike's open interest of 7,580 contracts at the start of the session.
MPEL fell 1.04 percent on Friday to close at $20.55. The stock reached $21.48 reached on Feb. 4, just below its lifetime high from January 2007. Casino stocks are up more than 20 percent in the last three months, almost doubling the performance of the S&P 500 in that time, according to our researchLAB analysis tool.
The calls bought on Friday, which lock in the purchase price of the stock no matter how high it might rise, are looking for MPEL to climbg roughly 9 percent or more by mid-April. These options could be sold earlier at a profit with any rally before then, but they will expire worthless if the shares remain below the $22 strike price. (See our Education section)
Melco saw more than 18,000 options change hands, double its daily average for the last month. Calls outnumbered puts by a bullish 18-to-1 ratio.
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